That's also not an equation for demand - it stating that demand is a function of those variables, but it does not tell you how they are related, and you are assuming the term for population has a particular effect on demand when you can't.
Mack Truck laying off 100s in PA & MD
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Its your equation, and that is exactly what it is - the Demand equation.
So you don't understand the equation. You sure your not really fed economist, not dentist?
I am not assuming anything. If disposable income is at or close to zero, the marginal propensity to spend is at or close to zero. That is what the equation says outright, and its a well known fact in the real world also.
It also says if disposable income is high, then propensity to spend is high, which is why even in the United States, which has the highest per capita expenditure on earth by a country mile, 50% of all consumption is done by the top 10% of household incomes, and the other 90% spend the other 50%.
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Forgive me for misspeaking, it's not a formula that tells you the relationships between variables. You keep assuming that the disposable income of the rest of the world is zero and this is not true. You assume that the population term for demand is negligible or zero everywhere else but the US and that is not true. The population term need not be linear and it is often a partial differential term. Many here are assuming you either make stuff in the US or you don't, when corporations can make some products in the US destine for US consumption but continue to make some products abroad cheaper for consumption by the rest of the world.Its your equation, and that is exactly what it is - the Demand equation.
So you don't understand the equation. You sure your not really fed economist, not dentist?
I am not assuming anything. If disposable income is at or close to zero, the marginal propensity to spend is at or close to zero. That is what the equation says outright, and its a well known fact in the real world also.
It also says if disposable income is high, then propensity to spend is high, which is why even in the United States, which has the highest per capita expenditure on earth by a country mile, 50% of all consumption is done by the top 10% of household incomes, and the other 90% spend the other 50%.
My original comment was there are lots of other people in the world and markets outside the US which are worth exploring because these people do in fact buy things to live, and especially when the US is intentionally putting up trade barriers, to assume we can demand whatever we want, however we want it, for everything sold here, is misguided. The counter argument seems to be only the US matters because we have more money. We matter a lot, but we aren't the only purchasers in the world and so I will stand by my original comment.
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Your the ones making assumptions - not me.
Your equation says that if income is low, demand is low. Do you somehow disagree with this?
Your also assuming that no one is currently "exploring" these markets so they should just go sell there. I work for a privately held European company, and I report directly to one of the owners. Were small, and we still sell everywhere on earth. Before this I worked for a S&P500 multi National. Trust me, there are no virgin markets, and none big enough to replace the US consumer demand. India was the most recent hot-spot, and it too has cooled. Everyone is selling everywhere already.
How this plays out in the current state is an entirely different matter because this is all about the world has too much debt and a declining population to pay it. Which is ultimately the reason why no one is buying trucks, or much else for that matter.
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1. I'm saying that income isn't low for the ENTIRE rest of the world, much of the world, but not all of it.
2. What I'm saying here is things have changed with the introduction of tariffs and if the US makes the barrier to trade here insanely high, some will try and overcome that barrier and succeed but some will not. What portion does or doesn't, I do not know. We can't assume everyone just caves and moves manufacturing here. My original statement is simply that some may choose to limit exposure to the US if it's too difficult to trade here and the prevailing attitude that we can just bully everyone to manufacture here is misguided. Subaru is an example where we will potentially lose manufacturing capacity here because the original plan was to move US and Canadian production to the US and now it's just US production.
3. My comments have nothing to do with this statement and I don't necessarily disagree.
I speak 3 languages and am the master of none. I’ve been to Europe and Israel. There are plenty of people with disposable incomes in Europe. There are also differences like Sicily which is poor versus northern Italy which is much better off in appearance.
You do know there are no "global tariffs" in affect right?
Only one country China.
I am sure you know other countries place tariffs on our products we will be dealing with them, one by one. You cant export Americans wealth overseas forever and sooner or later have to have a level playing field.
Now up to 37 TRILLION dollars
https://www.usdebtclock.org/
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1) the majority of the rest of the world - like 99%, is much lower. The few small countries where its higher are mostly banking centers so its skewed. However if someone invites you to move to Norway or Singapore, I would take them up on that offer.
2) I never said it hasn't. Everyone - here and everywhere else talks there book on whether its good or bad, so its all biased. But for every Subaru, there is a BMW that is planning to build more. Interestingly on that topic - did you know the USA is something like 60% of Subaru's total market? Surprising for a Japanese company actually.
3) OK. Me either.
I just spent a week in the Dominican Republic, poverty every where accept where there isn't. Lots of vehicles servicing tourism. Lots of building going on with US made heavy machinery. Lots of everything going on even in a country with a per capital GDP of $10K. Lots of countries in the world with much higher incomes and standards of living too.
The point is that prices did Not go up with the previous tariffs. Look at the whole chart not just energy. Information like this doesn't come from the mainstream media or the WSJ. One has to do research not using Google. My qualifications are that I'm intelligently curious. When I hear chicken little the "sky is falling" reporting, I try to find the truth. This same kind of reporting occurred in 17,18, and 19. So don't just trust the news that pops up on your phone or computer.
Nobody said that the rest of the world had zero disposable income.
The point is, comparing population numbers gives you no idea of the market. It’s like saying that the area of the rectangle depends solely on the length, while completely ignoring the width.
We do matter a lot, but we are not the only market in the world.
However, you cannot downplay the significance of the US market simply by looking at population numbers, which was your original point. We are not 330 million out of 8 billion, unless you were counting heads or human life.
But when one is trying to determine market significance, one needs to know how many of those people have money to spend, and your post, in which you try to downplay the importance of the US market, utterly ignored disposable income, utterly ignored the width of the rectangle, to continue the analogy.
Your original comment was specious, therefore, deliberately, misleading, by suggesting that we are a mere 4% of the world‘s population, for the purpose of determining the significance of our consumption/market.
While the population percentage is accurate, we’re actually closer to 25% of the world‘s market for goods.
That’s a big difference.
And that’s the difference I was trying to point out.
Apologies; did not mean it that way but aplogies just the same.
Yes, the Chips Act created a lot of jobs and is continuing to do so. But the main thing was to on-shore semiconductor Manufacturing, which I believe is critical, especially with the China Taiwan issues.
IMO, we absolutely need to focus on high tech in this country. Let the others fill up Walmart with cheap stuff.
The school districts around here are excellent.
The middle school at the end of the street has been awarded the "Distinguished School Award".
Using an outlier to prove a point is silly.
There not outliers. There is no correlation with spending vs outcome.
You can look all over the state of SC. The schools with the highest spending per student often have the worst outcome. The schools with the best outcome often have very low spending.
The best predictor is if the child has a stable home environment. Well tracked and well understood.
I'm not sure that's correct AG... Here's a tariffs tracker.
...and some companies may choose to spend there efforts on the other 75% if the US keeps trade barriers insanely high for a long period of time. 75% > 25%. That's a big difference and that's the difference I was trying to point out.
Maybe energy prices didn't increase because they were targeted tariff increases (steel, aluminum, etc.), somewhat reasonable levels and mostly short lived. BTW, prices certainly did increase on the targeted commodities and goods. No idea how one can say they didn't. Why would they not? Generally two things happen w/ tarriffs in the short term; companies absorb the costs and take the margin hit or pass the costs on to consumers...there is no other magic.
Glad you are curious and thanks for the guidance on my sources of news, now how many global operations have you had responsibility for? Established any China or other low-cost region sourcing? Offshored anything? Ever had approval authority on build sheets for various global local and US content compliance? Set up local suppliers and assembly to enable and support sales to NATO? Have friends whose business are being impacted? If the answer is none please pardon me if I am done here
, since I've been there & done that.
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Back to Mack:
Just drove the freeway for an hour paying attention to dozens and dozens of Class 8’s - for math purposes well over a hundred:
Freightliner hands down, then KW, and Pete.
Volvo 4
Mack 2
Just drove the freeway for an hour paying attention to dozens and dozens of Class 8’s - for math purposes well over a hundred:
Freightliner hands down, then KW, and Pete.
Volvo 4
Mack 2
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