What you really need to understand about inflation, is that we've had particularly exceptionally low long-term inflation in America for the last 50 years, outside of stagflation in the '70s.

And this is all enabled by globalization and global trade. Globalization fundamentally provides arbitrage for two things. Labor costs, and environmental regulation.

Because there were a lot of poor desperate countries that would build your stuff for near slave labor conditions.

In particular, China of course. But China has now passed through its phase of poor desperation. It is now an urbanized economy. So of a lot of other poor desperate countries aren't quite as poor desperate.

Globalization is fundamentally enabled by the US Navy and US military supremacy guaranteeing shipping trade on the oceans.

This has not been the historical Norm. It's actually historical anomaly caused by the power vacuum of world war II, and secondarily by the fact that the Cold war was between the US and maritime power and Russia, who are effectively landlocked.

Some scholars term China as a continental power, especially cuz of their history of invasion like the Mongols, but unlike Russia, China has a very large coastline with a lot of ports that aren't locked in by Arctic ice.

They are a hybrid Continental and a maritime power, and based on their shipbuilding, their ambitions are to become a maritime power.

This combined with American lack of enthusiasm for maintaining this global order, likely means that globalization will come to an end.

And that means onshoring production back from China.

We'll see if this actually happens, but that is the trend long-term.

And that involves a huge amount of switching costs, which essentially is going to be inflation.

I'm certainly not going to sit here and say that Trump's economic policies are correct. Of course, the proper way to handle a transition of reonshoring our production from our previous 50 years of globalization would be gradual and controlled.

Not a bunch of stupid chaotic tariff policies.

But essentially what Trump is doing is in line with everything I've described.

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bigbadfeline 5 days ago | parent | next [-]

> What you really need to understand about inflation, is that we've had particularly exceptionally low long-term inflation in America for the last 50 years, outside of stagflation in the '70s.

What you really need to understand is that we can, and we must absolutely, generally and non-exceptionally have low inflation at all times. There's absolutely no sane reason to have high inflation in a low-corruption financial system - none!

> Globalization... US Navy... US military... China hybrid... American lack of enthusiasm for guaranteeing shipping trade on the oceans.

A bunch of red herrings meaning nothing... It's not lack of enthusiasm, it's the overabundance of enthusiasm for tariffs and sanctions backed by the same US Navy & US Military to maintain a restricted trade regime which, not-accidentally, results in the US public being trapped in a monopolized and inflationary market.

> And that involves a huge amount of switching costs, which essentially is going to be inflation.

You mean, the population will bear the costs via the inflation tax, while the rich will be getting richer, because... historical norms should not be broken, especially this one?

Historically, messed up trade led to global wars, actually, it's either global trade or global wars, there's no middle ground. You failed to mention that important historical norm which is also one of the ways to make the rich richer.

The historical norms are something we should absolutely steer clear of, not use them as excuses for more nonsense in the future!

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AtlasBarfed 5 days ago | parent [-]

Do you think I'm advocating for inflation as an institution?

History is history. Maybe you think AI is going to herald in some era of non-inflation and free people from the control of the ultra rich.

It's pretty apparent to me that AI isn't going to do that. It's going to do very very very very very much the opposite.

I agree that disruption of trade leads to wars. Usually of very large scale but we haven't had one of those since the advent of nuclear weapons.

And people keep misinterpreting my comment that I believe Donald Trump has good policy. I absolutely don't. That's why I said the tariffs are insane. Theoretically what Donald Trump wants to do is bring manufacturing back to his white voters in the former middle class, and bring the US into an isolationist stance.

Biden did not put troops on the ground in Ukraine. I believe bush II would have enthusiastically. Biden did not roll back the tarriffs Trump imposed in his first term either.

So generally the overall political trend in the United States is to be like this.

Ask the rest of your comment. You could ignore history if you want and hope for something different. But.... Well you should know the quote about history, and I don't want to have to repeat it:-)

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bigbadfeline 5 days ago | parent [-]

> [Trump... Biden... ]

I've never mentioned either, nor do I assume what you think about them.

> So generally the overall political trend in the United States is to be like this.

The question I'm pondering isn't "what the trend is to be" but rather "why it has to change". Thinking about who and how could change it should wait, lest we end up putting the cart before the horse.

> You could ignore history if you want and hope for something different.

Being careful about not falling into the same traps as before isn't "ignoring history", it's learning from history, which is mostly the opposite of repeating it, because repeating the same thing with the same bad result is the definition of idiocy.

	▲	AtlasBarfed 4 days ago \| parent [-]
		So that's kind of the point. The Democrats are basically going this direction too. The Republicans since world war I have been inherently isolationist.

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judahmeek 5 days ago | parent | prev | next [-]

> But essentially what Trump is doing is in line with everything I've described.

No. Trump's tariffs are too unfocused to accomplish any goal besides increasing American inflation from what I've read.

Trump's tariffs on raw materials, metals, etc make no sense whatsoever.

Motivating the creation of new mines or refining facilities should have been done through subsidies, possibly combined with promise of future tariffs.

And, obviously, Trump's tariffs on raw materials raise the cost of construction & composite products, which will likely push manufacturing out of the U.S.

	▲	AtlasBarfed 5 days ago \| parent [-]
		I didn't say it would be effective. My point is that it is thematically aligned. I agree that it is counterproductive assuming that was what his goal is. Our military budget remains a comically bad allocation of funds. If we're going to be isolationist and we are, we should cut our number of carrier groups in half and throw all of that money into subsidies.

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amy_petrik 5 days ago | parent | prev [-]

>Globalization is fundamentally enabled by the US Navy and US military supremacy guaranteeing shipping trade on the oceans.

>This has not been the historical Norm. It's actually historical anomaly caused by the power vacuum of world war II, and secondarily by the fact that the Cold war was between the US and maritime power and Russia, who are effectively landlocked.

>This combined with American lack of enthusiasm for maintaining this global order, likely means that globalization will come to an end.

Oh here friend, I think you forget to add a citation to all that, here's your citation so people know where the idea come from (not you): https://en.wikipedia.org/wiki/Peter_Zeihan

	▲	AtlasBarfed 5 days ago \| parent [-]
		I like a lot of wood Zion says especially since it provokes thought. He is a hot take internet guy. Do I really think China is going to disappear over demographics? I think if you would gone back to the 1980s he would have looked at the Japanese demographics and said the same thing. Japan is still around and it's doing fine. Are we going to see privateers and one eyed captains pirating international trade like he once predicted? Not in the age of carriers. But what navies can do is they can harass ships: board them, inspect them, delay them. Arbitrarily close shopping lanes and force them to take other routes (China could do this to make their exports preferable to say Vietnams). Zeihan parrots a lot of other geopolitical thought and international relations thought. The general question post cold war was when the US will go isolationist. I believe largely that did not happen because US industrials wanted offshore production for cheap labor. So the US maintained its global focus. With China, and Xi in particular, doing the things that they are doing to him in capitalism in China, that is forcing a reevaluation of companies have their production. Sure. You could move it to Vietnam or Malaysia or Thailand or various countries like that, but that still places them within the Chinese military sphere. When you consider that we have a country like Mexico south of our border which is extremely productive, more productive than practically any other country. We currently have our production outsourced to any degree, why not move our production to Mexico? Most of our natural resources, especially with the discovery of shale oil in The Dakotas is sourceable from the northern hemisphere. But we'll see what happens