Why stability? If the stable state is not working, flip it. The stable order is facing popular resistance for a reason. Everyone who benefited from the stable state will feel pain and complain, and they'll correct their strategic stances for the newer unstable order: Onshored supply chains, better inventories than just-in-time, less reliance on inflation assets and more on production assets. Even those feeling the pain can see why, but the only ones blind to it are those ideologically staked to the old order, which was not working. Those people don't deserve to be stakeholders anymore, and if they're knocked off their perches, all the better. Renewal will happen.
If it won't persist because democracy will flip it around schizophrenically, then you're just speaking ill of democracy at that point. Can't have that.
> Why stability? If the stable state is not working, flip it.
Because this is a weird talk where only extremes are talked about, that is popular when you have only two established parties and no system that enables more nuanced ideas.
> and they'll correct their strategic stances for the newer unstable order: Onshored supply chains,
In a decade or so... maybe.
But why touch that stable state? Maybe lets bring back slavery? Or how about mandatory service and some land invasion? Or split out the states as independent countries? What else would you like to flip to check if it maybe works better, since stable state is not great?
The questions was why touch that stable state specifically. As in, why random tariffs, if you're up for flipping random switches with no good plan anyway. (My guess - it made some people lots of money. Not in a way that would make majority happy.)
> they'll correct their strategic stances for the newer unstable order: Onshored supply chains, better inventories than just-in-time, less reliance on inflation assets and more on production assets
How exactly do you think instability encourages long-term investment in manufacturing? Not the dynamic of being in a better position if factories simply popped into existence, but actually plunking down money hoping for a return in the face of economic slowdown and political instability.
The actual response I expect is even more goods shipped directly from China, with tariff taxes built right into the sale price (Aliexpress didn't miss a beat on that one), and with the general uncertainty raising Chinese sellers' profit margins.
How does disincentivizing rival supply chains and incentivizing domestic supply chains incentivize the construction of domestic supply chains? Are you really asking this question? Is there an echo?
I am asking how the construction of domestic supply chains is actually being incentivized here. And how it isn't just disincentivizing the remaining few domestic hops of the current supply chains and moving even the warehousing to foreign shores.
If the minimum viable customer-sale price after importing a given product rises above the minimum viable customer-sale price when domestically manufactured, the choice becomes obvious to entrepreneurs. This isn't difficult, and it isn't a trick.
Markets are not computationally easy (ie globally efficient), as you seem to be assuming. If they were, central planning would actually work.
Rather there are many sticky intrinsic factors like network effects, path dependency, and economies of scale that would need to be overcome to make the scales tip the other way. This is why once manufacturing started going to China, it then continued accelerating. To start bringing it back, we would need to clear a high activation energy.
Then there are the additional issues with the current approach. For starters, building new factories requires a bunch of industrial equipment. But with the blanket import taxes that has all shot up in price as well.
There is also the uncertainty of trying to plan on the long term scales of capital payback in the presence of an administration that flip flops on policies by the month, has seemingly no clue what they're doing, carves exceptions for the politically connected who bribe at McDonalds-al-Lago, and continues escalating the attacks against our traditionally stable-for-capital rule of law. From the investment perspective, it feels we're moving in the direction of a South American dictatorship where it only makes sense to run economically-colonizing "suitcase operations" rather than broad-base industrialization.
The "stability" is referring to how Trump's trade policies are constantly changing every few days, and are thus too unstable to plan business policy around. If Trump wants to promote US manufacturing, it's important that his policies to do so are stable enough for investors to plan profitable future US factories.
It is not talking about a stable government and the benefits/drawbacks of that.
The point is that if the trade policies are unstable, manufacturers will minimize imports and shipping across their supply chain. This isn't difficult to comprehend.
Yes. And you profusely apologized for wealth-class parasitism by way of stability for stability's sake, which is a core heterodox criticism of the previous order.
If it won't persist because democracy will flip it around schizophrenically, then you're just speaking ill of democracy at that point. Can't have that.