I have a theory that this will help their economy in the long run. Everyone has been trained to value dollars. So much so they value dollars over goods or time or any of the things dollars buy.
Really what this did was temporally disrupt their economy. As the guy on the show said, they aren't really importing anything. They don't have the financial standing to import things. But they are exporting. What is the goal of exporting? A layer 1 understanding is that it's to get dollars. But a better understanding is that it is to get imports. If their exports are not producing an ability to import then you are doing their economy a favor in the long run to free up that labor that wasn't increasing the material wealth of the country.
Do you know how rich China would be in terms of physical goods if it maintained its manufacturing scale but didn't export anything? Of course it is better to have trade than not. Recardian advantage is a thing. But everyone assumes varying from that view is a little more intellegent. But if so I'd argue it goes the other way. Exports make a few key people in a country cash rich while making a country materially poor. It's good to have a trade deficit. It's good for the average person. But it's bad for a few concentrated people so they lobby to get the government to open up export lanes for them. While the people would do better if those goods had to benefit the domestic market.
People may say, "What about the jobs!?." Look at employment rates country to country around the world. It's about the same everywhere no matter the level of development or central bank policy or export policy. Employment equilibrates to the same level no matter what. So you could retain your productivity for the consumer and have the same number of jobs soon enough. Or you can seek an immediate high that a number went up. The number of dollars earned and number of jobs. But if those dollars buy less then you are just excited a number went up.
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I have a theory that this will help their economy in the long run. Everyone has been trained to value dollars. So much so they value dollars over goods or time or any of the things dollars buy.
Really what this did was temporally disrupt their economy. As the guy on the show said, they aren't really importing anything. They don't have the financial standing to import things. But they are exporting. What is the goal of exporting? A layer 1 understanding is that it's to get dollars. But a better understanding is that it is to get imports. If their exports are not producing an ability to import then you are doing their economy a favor in the long run to free up that labor that wasn't increasing the material wealth of the country.
Do you know how rich China would be in terms of physical goods if it maintained its manufacturing scale but didn't export anything? Of course it is better to have trade than not. Recardian advantage is a thing. But everyone assumes varying from that view is a little more intellegent. But if so I'd argue it goes the other way. Exports make a few key people in a country cash rich while making a country materially poor. It's good to have a trade deficit. It's good for the average person. But it's bad for a few concentrated people so they lobby to get the government to open up export lanes for them. While the people would do better if those goods had to benefit the domestic market.
People may say, "What about the jobs!?." Look at employment rates country to country around the world. It's about the same everywhere no matter the level of development or central bank policy or export policy. Employment equilibrates to the same level no matter what. So you could retain your productivity for the consumer and have the same number of jobs soon enough. Or you can seek an immediate high that a number went up. The number of dollars earned and number of jobs. But if those dollars buy less then you are just excited a number went up.