> Japanese electronic tariffs in the 80s
Also motorcycles. https://en.wikipedia.org/wiki/1983_motorcycle_tariff
Also motorcycles. https://en.wikipedia.org/wiki/1983_motorcycle_tariff
Manufacturing is cheaper if you have access to resources and such. Japan may of had abundant of but in this case I don't feel it's was all about manufacturing costs.
Was it a cash cow situation, where their one formula was working but as well as where Harley were reluctant to invest in a different avenue, to innovate causing cow to dry up. And that is when they called in the government to settle? That is always the impression I seem to receive.
Excluding manufacturing costs was it because they were scared of an innovation being a failure?
The same cash cow formula can be seen with the likes of Disney Pixar and Toy Story 5, a pointless movie plot at this point where if money was invested, a new creation could be born.
What you are seeing is "the bar" for a successful manufacturing business increasing until only the most profitable are left -- things like chips, things like shell companies that exist to monetize a brand. "New growth" isn't highly profitable so it never has a chance to get started (unless a recipient of an asset windfall is willing to finance it all the way to "the bar" -- see: Elon Musk).
If competition is on the scene then how can you assure me that myself taking the risk of investing will return me the sum I wish for in return.
Production has already been established but the threat is in that an another forecastable model exists and that to catch up to their market will require more investment and expenditure which could lead in less chance of a return. And even if the model is copyable; as like the trope of Chinese knockoffs to of Japanese products, you're still at a lower advantage.
It's not they don't want to innovate but the risk to gamble on innovation is high enough that you could stifle competition cheaper via governmental means.
This slows their forecast and where you can then strategise to overcome the competition rather than risking expenditure via innovation. Crafty, cheers.
Triffin's Dilemma says that in the case of the modern USA, assets will be pumped. Macroeconomics says asset pump = export dump.
The way that economics dumps exports is by raising the bar (strong currency = poor customers, expensive assets = expensive houses = expensive labor, costs go up, price goes down, profitability is squeezed). Eventually the bar became impossible to hop without a cheat code like "good brand and no R+D" or "software level profitability".
At the individual level, manufacturing pay went in the shitter as the jobs dried up while house prices and stock prices went through the roof... so everyone who could became real estate agents, or doctors overcharging real estate agents, or sellers of investment scams to venture capitalists.
What's wild is that this happened to the Spanish, the Dutch, the English, and by the 1960s Triffin could see that it would happen to the US as well.
If you want details from an economist who does his homework, "Trade Wars are Class Wars" by Klein and Pettis.
That's true.
> assets and exports compete in the balance of payments, an asset windfall kills exports by increasing the currency hurdle and embedded asset price.
They don't really have to compete with each other. It depends on what the central bank does (or doesn't do) about the exchange rate, for example.
Assets have had such a stranglehold over US politics for the last 50 years that if we ever actually run pro-export policy it won't be due to doomed self-promotion by exports (we even have a term for the pattern where this fails on first contact with tradeoffs: TACO) it will be because assets self-sabotage, implode, and exports fill the vacuum.
Germany and Singapore are two prominent historic examples of countries that export just fine despite a strong currency.
Weakening your domestic currency has barely any impact on the real price of traded goods and commodities: they just price at the world market rate. The impact is felt for goods with sticky prices, chiefly labour. Weakening your currency is mostly a way to try and give everyone a wage cut. That can make your exports more competitive for a while. But it's not the only way to cut workers' wages. (And in general, later you seem to agree that giving ordinary people more real income is kind of the point of economics. So giving everyone a real wage cut seems a bit of a curious way to get there.)
> we are already seeing yields rise despite a dollar that is still strong enough to crush exports.
Rising yields fairly mechanically leads to a stronger dollar.
Btw, you might like https://en.wikipedia.org/wiki/Lerner_symmetry_theorem
The Lerner Symmetry Theorem suggests roughly that import tariffs are equivalent to export taxes; and export subsidies are equivalent to import subsidies.
And the US is actually doing pretty well in exports, if you take into account that they are exporting not just goods but also services; and if you squint a bit, you can also see that Americans love to found new start-ups and new world beating companies and sell shares in them to the world. That's also a kind of export, but it shows up on the other side of the ledger for accounting reasons.
Similarly, if you build an office building in Seattle and sell it to a foreigner, that also doesn't show up as an export for accounting reasons.
> The model assumes ... no foreign ownership of domestic assets, balanced trade
It's a magnifying glass with duct tape over the lens.
They are not necessary to work in practice.