Comment by mandeepj | Hacker News Reader

Comment by mandeepj | Hacker News Reader

Parent Full thread

> The things that dominate middle class budgets: food, housing, medicine, education, are surprisingly local

> The economists who claim that tariffs will harm normal Americans were also the economists who claimed that sanctions would destroy the Russian economy. They had the opposite effect, for reasons that still remain somewhat unclear.

> It is also notable that Chinese competitiveness has only increased as they have engaged in decades of state economic planning and market barriers. The economists who have told us since Reagan that this is inefficient and stupid might be ... wrong.

You are quite wrong there with all of those three points.

#1. a lot of food items come from Mexico, South America, Asia also. Housing material from Canada and China. A lot of meds come from Asia especially India. Majority of Stationary is manufactured in China as well.

#2. Russia is struggling with economy. But remember it has a lot of help from China, Iran, N Korea, and India. That offset a lot of sanctions. Europe is still buying gas from them.

#3. I’ve to remind you this - China exports in trillions.

#1. Total US food imports are about $200B. That's about 10% of US household spending on food, measured by supermarket plus restaurant sales ($800B + $1T).

#2. It's hard to know what's going on in Russia.

#3. High exports don't disprove GP's claim about "state economic planning and market barriers". In fact, they prove the success of those policies and help China maintain a $1T trade surplus, the very opposite of the US's situation.

Why would you include restaurants in household food spending rather than something like entertainment?

About 25-33% of resturant sales are the cost of food. So you can break out the total spent on food pretty easily.

> That's about 10% of US household spending on food

Isn't ~10% spending on food like a historical best of any country ever?

I'm confused what this means? I think OP meant that 10% of the _spending on food_ is imported, so 90% of the household spending on food is from domestic markets.

One thing to note when comparing imports to spending. Import numbers are based on the commercial invoice value (i.e., how much it cost to produce) while spending is based on the sale price. So it's an...apples and oranges comparison. But I agree with the broader point that a lot of what we eat is produced here (especially meat).

>One thing to note when comparing imports to spending. Import numbers are based on the commercial invoice value (i.e., how much it cost to produce) while spending is based on the sale price. So it's an...apples and oranges comparison.

The context of this is the impact of tariffs on households' budget, and in that context, invoice value is fine, because that's the value on which tariffs are applied. 30% tariffs don't mean all foods go up 30%, it means it goes up by 6% (20% of 30%).

#2: The war economy pumps a huge amount of money back into the Russian market, but regardless of the outcome, the state will be left with a major deficit—and that will affect poor Russians the most. Their roads will fall into disrepair, substance abuse treatment will deteriorate further, the quality of their schools will decline, and veterans (including freed ex-convicts) will be highly visible when they return from the front lines.

Russia may now assume the role of the little brother of the East, having poured vast resources into the invasion while China and India have bided their time, watching the US-EU relationship deteriorate. Without getting too ahead of myself, it almost feels like watching the stars align perfectly for China, which could emerge as the “good guy” on top — much like the USA after the 1950s. They didn’t have to go to war, yet they’ve benefitted from a Russian military failure, Trump-related chaos, a possibly weakened NATO, increased exports to the EU and other markets, and more. Culturally, Hollywood may even shift to Beijing, and our grandkids might find it strange that Europeans once idolized the USA. It remains to be seen how China will manage to downplay its repression.

I visited Russia 15 years ago and have long wanted to return — assuming those in power were replaced with a more friendly alternative — but I’m no longer sure I want to. I imagine it will feel similar to the last years of the Soviet Union with widespread alcoholism and child prostitution. Historical significance only goes so far when signs of social despair are visible on every street corner.

> lf, it almost feels like watching the stars align perfectly for China,

That will never happen while China remains a communist nation.

Reply on news.ycombinator.com