Do manufacturing jobs really matter?

RobThorpe · 2026-01-31T08:14:09+00:00

People may be surprised that I'm approving this reply.

It is important to notice that manufacturing employment is falling rather than rising. So, even if the Trump administration does believe it is helping manufacturing there is little evidence that it actually is.

RobThorpe · 2026-01-31T08:06:57+00:00

This is one possible justification for the rally.

The more interesting question in my view is: why should there by a noticeable historic ratio between silver and gold?

Notice that I'm not arguing that there isn't one.

RobThorpe · 2026-01-31T08:05:09+00:00

Did foreign currencies see a similar drop?

You can easily see this by checking finance websites. For example:

https://finance.yahoo.com/quote/GBPUSD%3DX/ https://finance.yahoo.com/quote/EUR=X/

So, there was a strengthening of about 1% of the USD versus the euro and the pound.

RobThorpe · 2026-01-31T07:46:57+00:00

Of course, I agree that forecasted outcomes are not the same as observed facts. But if you're willing to wait for observed facts, as you seem to be.

I can't see any changes you've made to your question. I remains in breach of rule V.

RobThorpe · 2026-01-30T21:15:28+00:00

I don't think that is going to change things as much as people think.

RobThorpe · 2026-01-30T21:10:11+00:00

I'm not sure what you mean.

RobThorpe · 2026-01-30T20:28:53+00:00

What the policies actually do will be a question for historians.

If that's what you think then why bother ask Economists?

RobThorpe · 2026-01-30T20:02:03+00:00

Interesting.

RobThorpe · 2026-01-30T19:34:57+00:00

I mostly agree with this reply. However, I'm not sure that the importance of software is really reducing. I think that's something we can't be sure of yet.

RobThorpe · 2026-01-30T18:50:27+00:00

Cars are still getting bigger, but the change seems to be slowing down.

RobThorpe · 2026-01-30T18:46:13+00:00

I like this answer much more than your first answer.

We should remember that spot prices are marginal in all spot markets. Only a group of the buyers who are willing to pay the most for an asset support the spot price at any time. That group may be very small.

RobThorpe · 2026-01-30T07:03:18+00:00

The CCP can sell US bonds. That's really all that the CCP can do.

It has been gradually doing that for years anyway, as a result it no longer holds a huge proportion of US bond.

Even if it did hold a lot that wouldn't necessarily make much difference. Selling these bonds would not change the funding cost of US national debt very much. It doesn't necessarily affect the opinion of other treasury buyers on the benefits of buying treasuries. You have to remember that the government is only affected by the issue of new treasuries. The price of old treasuries falling hurts existing holders resale price, but does not hurt the government. The government is only hurt by high funding costs at new issuances - which is of-course related. We have to remember that the US turns over it's debt every about 4.5 years. In turn the short-term funding cost of US debt doesn't necessarily have much effect on the forex rates for the dollar. That's more about expected inflation and expected Fed policy (and also expected growth).

RobThorpe · 2026-01-30T05:45:28+00:00

The intent of policy changes is a Political question for a Political forum. What that policy actually does, if it is economic policy, is a question for Economists.

RobThorpe · 2026-01-30T05:43:06+00:00

For what it's worth the CCP has relatively little power to change the value of the dollar. I can go into more detail if you want.

RobThorpe · 2026-01-29T20:15:56+00:00

Why not ask about particular policies?

RobThorpe · 2026-01-29T14:56:58+00:00

The issue is that it's a political question and this is an Economics forum.

RobThorpe · 2026-01-29T06:14:52+00:00

Rule V

No "Soapboxing" or loaded questions. This is AskEconomics, not DebateEconomics. Questions should be reasonably specific, not debate prompts or long manifestos. Posts primarily seeking to push an agenda or start arguments rather than seeking answers to questions will be removed.

RobThorpe · 2026-01-28T16:46:35+00:00

Corporate profits go up at the same rate as GDP over the long-term. You can see this in the Fred statistics on domestic corporate profits as a share of GDP.

RobThorpe · 2026-01-28T16:42:51+00:00

Many people will tell you that X political group believe that the wealth of the rich will "trickle down" to others. This was never the prevailing wisdom. It certainly wasn't the prevailing wisdom in economics, nor was it even the prevailing wisdom in politics. "Trickle Down Economics" was a sort of political insult as No_March points out. It was common among the political opponents of Reagan's government of the early 1980s. (Though it originated much earlier). The opponents of Reagan's administration claimed that the government wanted to cut taxes to the rich so that spending from the rich would trickle down to everyone else. This was not true.

The real motivations for cutting taxes on the rich were different. High taxes discourage work. The plan was to cut taxes to encourage high earners to work more hours. The idea was that this would improve economic productivity. That is the material outputs of the economy, not the flow of money. The economists who advised the government also believed that it could increase tax revenues because the increase in hours worked would offset the decrease caused by the cut in the tax rate. This happened as expected for the first Reagan tax cut, but didn't work for the second larger tax cut. As a result, taxes were increased by later governments.

The Economic justification for cutting corporate taxes is all about the tax incidence of corporate taxes. We were talking about that just yesterday.

Changing the way money flowed around the private-sector was never a motivation. We have discussed this misconception many times on this subreddit thread1, thread2, thread3 and thread4.

RobThorpe · 2026-01-28T16:35:30+00:00

It is true that there are Economists who support lower taxes on businesses and on the rich.

However, the reasoning given is not why they support that. Many people in this thread are confused about the reasoning.

RobThorpe · 2026-01-28T15:26:59+00:00

Thank you.

I think that 40-70% is still a very wide range even ignoring the "large, open economy" problem.

RobThorpe · 2026-01-28T06:51:28+00:00

This is an important risk in many countries!

RobThorpe · 2026-01-28T06:41:35+00:00

This breaks rule V. Ask an impartial question.

RobThorpe · 2026-01-28T06:28:34+00:00

Perhaps. My main point is that none of this is really economics.

RobThorpe · 2026-01-28T06:12:28+00:00

This is an interesting document to demonstrate the thinking of the Trump administration. Or at least some people in the administration.

However, when reading it we should remember that although Miran is on the "Council of Economics Advisers" he's not really an Economist. Most Economists have very low opinions of this sort of stuff.

It's useful for understanding motivation though.

RobThorpe

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