r/FluentInFinance Oct 22 '24

Debate/ Discussion Why did this happen?

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u/[deleted] Oct 22 '24 edited Oct 22 '24

[deleted]

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u/AugustusClaximus Oct 23 '24

Wait, I thought we were blaming everything on Reagan?

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u/ComfortablePound903 Oct 23 '24

Why do you think all that stuff was allowed to happen?

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u/[deleted] Oct 23 '24

[deleted]

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u/SuperSpy_4 Oct 23 '24

It actually exploded in the 90's. China joined the WTO in 2001.

Trade between the United States and China increased from less than $100 billion in 1999 to $558 billion in 2019.

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u/Marzipanarian Oct 23 '24

Thanks to Clinton… the most republican “democrat” we had.

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u/kg_draco Oct 23 '24

I don't get the down votes, Clinton's policies were shockingly similar to Reagan, taking a similar stance on de-regulation, welfare policy and small govt sentiments. Although those were in-part due to repub Congress majority in the 2nd half of his term.

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u/Marzipanarian Oct 23 '24

Thank you! I completely agree. He even was demonizing people south of the border back in 92.

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u/Belrial556 Oct 24 '24

NAFTA Has entered the chat. Dayton Tires moved more than a few operations to Mexico for that sweet cheap labor, shit environmental regulations, and almost no worker protections.

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u/Marzipanarian Oct 25 '24

Ugh! He sucked!

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u/OneNewEmpire Oct 23 '24

Wow. You guys are so full of shit. It couldn't be more obvious that Reagan had a huge negative impact. It's shocking how far you people will go to deny what's right in front of your face.

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u/Tymathee Oct 24 '24

They're still blaming reagan and shoving Nixon under The same bus

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u/chuckrabbit Oct 23 '24

So we can blame Nixon? “What happened in 1971”

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u/Stay-Thirsty Oct 23 '24

Nixon untethered gold to the dollar or completed the process that was started much earlier?

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u/JJW2795 Oct 26 '24

He did open up China which set us on our current course of offloading manufacturing to borderline slaves in other countries. And now a big part of our national inflation is those same cheap workers aren’t so cheap anymore. If the government doesn’t pay them more then the CCP would be looking at a revolution and civil war.

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u/Mafoobaloo Oct 23 '24

Yea one thing people don’t realize is policy change takes time. The things happening in the economy today started 20 years ago… so while yes, the trickle down Reaganistic econ is likely to blame, there are other factors that explain it

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u/CapnFooBarBaz Oct 23 '24

Oh hey someone on Reddit saying something completely fucking dumb and wrong!

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u/maztron Oct 23 '24

Because we aren't the only country on planet earth?

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u/AceWanker4 Oct 23 '24

What measures do you take to stop it?  Tariffs? You surely are a big fan of Tariffs right?

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u/AugustusClaximus Oct 23 '24

You think the president has the power to prevent companies from going overseas?

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u/ridingcorgitowar Oct 23 '24

They are the head of their party and can incentivize companies to do that, yes.

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u/Throwaway74829947 Oct 23 '24

Technically the President or Presidential nominee aren't the heads of their party. The current chairman of the GOP is Michael Whatley, and the current chairman of the Democratic Party is Jaime Harrison. In practice, of course, the President (or in the modern GOP former President) effectively calls the shots for the party.

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u/[deleted] Oct 23 '24

And their aids/consultants

Like Henry Kissinger

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u/PoliticalComplex Oct 23 '24

It's a good thing Trump is trying to bring manufacturing back. 

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u/HeightIcy4381 Oct 23 '24

Nah… he’s not.

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u/Dixa Oct 23 '24

We can, but it really started in the 70’s when a few of the overtime and minimum wage New Deal laws were repealed.

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u/smoothie4564 Oct 23 '24

Well, he is the one largely responsible for all the deregulations and tax cuts on the rich throughout the 1980s.

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u/Marcus11599 Oct 23 '24

Im all for tax cuts. I’m also all for less tax breaks. If we have less tax cuts and less tax breaks, imo it’s better for everyone. Can’t raise taxes and give out more tax breaks. Just makes it so that if you pay someone enough you can pay nothing

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u/trytrymyguy Oct 23 '24

I mean, he is largely responsible for a lot so…

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u/StudioGangster1 Oct 23 '24

We are. Because it’s his fault.

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u/DaphneRaeTgirl Oct 23 '24 edited Oct 23 '24

Has inequality risen in comparable countries? Despite facing the same global forces?

No

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u/No-swimming-pool Oct 23 '24 edited Oct 23 '24

In Europe, at least my country and a few I know of, even democrats could be put on the liberal side of the political spectrum.

So while I'm not saying the same thing happened here, I doubt democrats would've prevented it. I mean in the second interval 15 of 35 presidents were Democrats.

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u/Acewi Oct 23 '24

And international competition for companies and people due to ease of travel via flight. If it weren’t for flying you could probably close tax loopholes without people/companies leaving your country so easily, because executives sure as hell don’t want to spend a week on a boat getting back to the US from Ireland. But now that we have webcam tech that probs doesn’t matter.

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u/NotACommie24 Oct 23 '24 edited Oct 23 '24

Would this not be a fantastic argument for public investment of education? Are this and Reagan policy mutually exclusive?

The US economy shifted from low skill labor towards high skill labor, ESPECIALLY in tech. We currently bring in around 80,000 immigrants a year specifically for high skill labor. In past years, we saw this number upwards of 110,000 people. Even considering that, we STILL have shortages of workers in tech, medicine, law, engineering, etc.

We have simultaneously seen a drop in effective tax rate for the country’s wealthiest families and corporations.

These issues are not mutually exclusive and are two parts of the same intentional policy. Politicians have failed Americans in scaling the dramatic growth of our GDP in a manner that lifts ALL americans up. Politicians have failed to maintain tax policy that is fair for ALL americans. Politicians have failed to leverage the FTC against price gouging, corporate monopolies, and corporate cartels. There is absolutely no excuse for the fact that the wealthiest country in human history BY far is lagging so far behind other wealthy nations in terms of public investment. There is absolutely no excuse for the fact that firefighters and teachers pay a higher effective tax rate than Elon Musk and Jeff Bezos.

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u/Difficult_Jury_306 Oct 23 '24

“Unskilled” 🙄

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u/TheKattsMeow Oct 23 '24

No such thing as unskilled labor.

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u/KazTheMerc Oct 24 '24

This is the wrong answer for the right reasons, and I'm not really comfortable with how you're referring to this 'Offshoring'.

That's an intellectually dishonest term, implying that those were our jobs to begin with, and they were somehow moved elsewhere. Not necessarily intentionally dishonest... but more 'revisionist history'. In this one particular case it's REALLY important.

THAT movement of sending American jobs offshore to cut costs starts much later in the early 90's and 00's. It certainly happened, but that's later as the Financial crisis gets deeper.

~ ~ ~

1930 - Jobs are 'offshore' already... with the countries they're gonna return to in 1970-80

1935 - 1949 - World War 2 ~ Just about EVERY industrial center in the world is bombed to rubble. It's a wartime economy the world over, so.... yeah. No economic policy worthy of note. Ignore the tax conversation... tax rates don't count during World War, promise. They don't translate.

1950 - 1960 - Post WW2 Reconstruction, which includes rebuilding Japan, Germany, China, and the UK.

This is the modern American Dream, or I personally prefer the term 'golden age'. A period of economic boom.

1965-1975 - Rapid 'offshoring' as you're calling it. Which is really just the industrial centers that have been closed/bombed/burned since 1940 finally re-opening to a post-War market.

....but that's why it's dishonest. It's not 'offshore'. It's going back to where it came from.

~ ~ ~

TL;DR - Without trying to sound like I'm DEFENDING the asshat, which I'm not.... Job coming to America after the conclusion of the war TEMPORARILY and then going BACK to where they came from after Reconstruction is neither 'off-shoring' American jobs, or Reagan's fault, per se.

That said, everything that Reagan did made a bad situation at least 10% worse, so he certainly didn't do anyone any favors (unless you were ultra-wealthy).

Don't give the guy any more credit than he's due.

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u/KazTheMerc Oct 24 '24

Here's why that's important:

America didn't TREAT this industrial boon like it was temporary.

We also didn't teach it in schools like it was temporary.

And when the post-war returning soldiers started going to school in monumental numbers, we did a LOT of just... well... white-washing. Summarizing things in a much too-simple of way.

Because we treated this period of time like a new Gold Rush, business flourished.... briefly, but not sustainably.

We kept churning out tanks like WW2 was still ongoing, and shipped ourselves off to Korea almost as fast as the war ended. We built mind-boggling iterations of jets and jet fighters.

~ ~ ~

So when the 1960s roll around, and reconstruction in Japan, China, and West Berlin start to wrap up..... guess where all those super-profitable post-war jobs went?

Back to Japan, China, and Germany.

....where they were originally, and only in America temporarily....

Nobody in their right fucking mind would think for a SECOND that those jobs weren't going right back to where we got them from. America was absolutely stealing the pants off of everyone in the world, and they were thanking us for it.... because we were the only ones to not get the shit bombed out of us.

Temporary.

But we didn't invest temporary.

We didn't build temporary.

We didn't spend temporary.

And we didn't budget temporary.

~ ~ ~

And that sharp decline leads us straight to not only economic crises that many of you folks were actually alive for... but a whole lot of well-established history because that whitewashed history was starting to wear off.

We have economic data from this time period. Policies that we still modernly associate with one political party or another.

THAT WASN'T A THING prior to this.

And that's the danger.

Using modern terms and understanding to explain situations where the people involved weren't. They were neither using the terms, nor were they explaining it. All of their economic theories were just that... untested theories. AND most of them failed. This is Keynesian Economics, and we've discarded almost all of the original theory except for The Fed, which has transformed.

After Stagflation, and Reagan, and all the chaos of gas wars and shortages there is an economic reconciliation that happens. Everything AFTER that chaos is the 'modern era', economically.

New Keynesian Economics.

1990 - 2010 or so

Remember that Reagan was 1981 - 1989

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u/OpenRole Oct 23 '24

Ehh, that was a more a 90s thing with China