Posted on 10/25/2006 5:56:53 AM PDT by from occupied ga
There are only a handful of products that Americans import that cannot be produced at home and therefore create jobs for Americans. Let's look at a few of them.
We import cocoa from Ghana and coffee from African and Latin American countries. We import saffron from Spain and India and cinnamon from Sri Lanka. In fact, India produces 86 percent of the world tonnage of spices. There's absolutely no reason these products cannot be produced by Americans, and we could be cocoa, coffee and spices independent.
You say, "Williams, that's crazy! We don't have the climate and soil conditions to produce those products. Many spices, for example, require a moist tropical environment." No problem. We have the technology whereby we can simulate both the soil and weather conditions. We could build greenhouses in which to grow cinnamon trees and get our scientists to create the same soil conditions that exist in Sri Lanka. Greenhouses could also be built to simulate the climate conditions in Africa and Latin America to grow cocoa and coffee. In the case of cocoa, the greenhouses would have to be Superdome size to accommodate trees as high as 50 feet.
You say, "Williams, that's still crazy! Imagine the high costs and the higher product prices of your crazy scheme." I say, "Aha, you're getting the picture."
There are several nearly self-evident factors about our being cocoa, coffee and spices independent. Without a doubt, there would be job creation in our cocoa, coffee and spices industries, but consumers would pay a much higher price than they currently do. Therefore, nearly 300 million American consumers would be worse off, having to pay those higher prices or doing without, but those with the new jobs would be better off.
So let's be honest with ourselves. Why do we choose to import cocoa, coffee and spices rather than produce them ourselves? The answer is that it is cheaper to do so. That means we enjoy a higher standard of living than if we tried to produce them ourselves. If we can enjoy, say, coffee, at a cheaper price than producing it ourselves, we have more money left over to buy other goods. That principle not only applies to cocoa, coffee and spices. It's a general principle: If a good can be purchased more cheaply abroad, we enjoy a higher standard of living by trading than we would by producing it ourselves.
No one denies that international trade has unpleasant consequences for some workers. They have to find other jobs that might not pay as much, but should we protect those jobs through trade restrictions? The Washington-based Institute for International Economics has assembled data that might help with the answer. Tariffs and quotas on imported sugar saved 2,261 jobs during the 1990s. As a result of those restrictions, the average household pays $21 more per year for sugar. The total cost, nationally, sums to $826,000 for each job saved. Trade restrictions on luggage saved 226 jobs and cost consumers $1.2 million in higher prices for each job saved. Restrictions on apparel and textiles saved 168,786 jobs at a cost of nearly $200,000 for each job saved.
You might wonder how it is possible for, say, the sugar industry to rip off consumers. After all, consumers are far more numerous than sugar workers and sugar bosses. It's easy. A lot is at stake for those in the sugar industry, workers and bosses. They dedicate huge resources to pressure Congress into enacting trade restrictions. But how many of us consumers will devote the same resources to unseat a congressman who voted for sugar restrictions that forced us to pay $21 more for the sugar our family uses? It's the problem of visible beneficiaries of trade restrictions, sugar workers and bosses, gaining at the expense of invisible victims -- sugar consumers. We might think of it as congressional price-gouging.
Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of More Liberty Means Less Government: Our Founders Knew This Well.
--No matter what kind of lipstick you put on that pig
our international economic involvement seems to have killed off the American dream--
Amen to that. 40-50 years ago when everything (save the diamond in your wedding ring) was made in the USA, the dollar went alot further than it did now; back then one breadwinner in a blue-collar job could buy a house, a new car, and put a kid through college. So much for "free" trade.
The benefits are evident to anyone who understands the concepts in the article.
Much of the rest of your points go to whether or not this country has a logical consistent trade policy. It does not, as you point out. Perhaps it should be a political initiative. But in the past, that effort has descended into a call for high tariffs, trade wars and isolationism. A truly horrible "solution" to the problem.
Thanks for totally ignoring the point of my post.
--As a result of those restrictions, the average household pays $21 more per year for sugar. The total cost, nationally, sums to $826,000 for each job saved. Trade restrictions on luggage saved 226 jobs and cost consumers $1.2 million in higher prices for each job saved. Restrictions on apparel and textiles saved 168,786 jobs at a cost of nearly $200,000 for each job saved.--
The social costs of unemployment/underemployment (welfare, domestic violence, substance abuse) are greater than the costs of "protectionism."
Agreed. My father was an 8th grade drop out. He was able by being a tool grinder to buy a home, afford it comfortably and a car for him and my mother. This was about 2 miles off the beach in Los Angeles in the early 70's.
Good luck with that now. How is this an improvement? Our global economy has forced wives to work in many areas even if they want to stay home with the kids. You have the choice of course to move to North Dakota away from all your family and friends. It's all part of globalism. These folks don't get it. They look at a budget line item, and don't look at reality. We as a country are massively in debt, our government, and our families. Both parents are working, the kids are raising themselves, parents are working crappy jobs making nothing, and none of this is acknowledged. It's cheaper to get tea in China or India. So we are better off. Let's throw a parade.
Take a chunk of graphite, whittle a point on the end, and place in a simple, reusable wooden clamp, formed from two sticks and a metal sliding band.
Yes there are EMOTIONS! like for example, I'm sure you've heard,
"They're takin' our jobs."
Well they aren't your jobs and they aren't our jobs. They belong to whoever can offer the best product for the lowest cost. If bloated union workers can't compete with foreign workers then do you think that we should all subsidize them? You apparently do, Williams thinks not, and I agree. I feel no obligation to prop up an inefficient industry with the fruits of my labor. You are welcome to contribute to paying more for the same things if you want to, but most of the rest of us like to make the best economic decisions we can.
"It is impossible for a nation to maintain a strong manufacturing sector over a long period of time unless it has a lower standard of living than its trading partners."
As you are a Canadian (I assume), I'm absolutely SHOCKED that you have missed the example of the British Empire in this regard.
As Orwell once put it (paraphrased) "the health of the British dividend-drawer is dependant upon the sweating of Indian coolies". I would think that the British home islands (and Canada) have always had a much higher standard of living than, say, India and Burma (even today, long after they have been granted indpendance and that industrialization has become a world-wide phenomenon). Given that example, the standard of living of the typical (white) British subject had ALWAYS been greater than that of it's major trading partners during the height of the Empire.
This example would seem to turn that particular argument inside- out, no?
bloated union workers? Ok, unions suck. There are barely union jobs any more. I think union membership is what 8-10% now.
So, an American who isn't willing to work for $.17 an hour 12 hours a day 6 days a week with no benefits, no health care, no worker safety, and without a leg iron is bloated.
You are for the race to the bottom. I am too "bloated" I guess to work in a Chinese Prison camp. Silly me. Let's outsource everything to China.
Where do you get the graphite? Go to the store any buy it?
whittle a point on the end,
Where do you get the knife to whittle a point on it?
and place in a simple, reusable wooden clamp,
Where do you get the clamp?
formed from two sticks and a metal sliding band
where do you get the metal? How do you form the band? To do all of these things you have to interact with someone else.
--"It is impossible for a nation to maintain a strong manufacturing sector over a long period of time unless it has a lower standard of living than its trading partners."--
Japan puts the lie to this theory. It has a living standard far higher than any of its neighbors, and yet its manufacturing sector is larger than any of its neighbors (even China IRRC).
Why should I bother responding to you when you don't answer my questions? Answer I shouldn't. Go for answer to the pencil question.
Wrong. You aren't going to pass that Chinese furniture down through the generations like you did with the quality stuff made in North Carolina. Oh, that blender your grandparents bought in the 1950's that works. Maybe you can borrow that when the Chinese crap broke down after 18 months. Yes, the Chinese are putting great shoes together too. Americans knew/know nothing about that.
It's a trade off. We are not trading like and like here. We are getting disposable crap for cheapness. Absolute crap.
You overlook one key point with regard to Great Britain that reinforces my point. When it had a higher standard of living than its trading partners (India, Burma, etc.), Britain was maintaining a huge trade deficit with those places.
How many people in Great Britain today work in primary (agriculture and mining, for example) and secondary (manufacturing and construction, for example) industries?
If we produced components for our jet fighters, missiles and stealth weapons in China, DoD budget can be reduced because we can buy the same amounts of weapons with less money, thus produce a budgetary surplus which can be used to reduce the deficit or reduce taxes. This would also increase the standard of living for many Americans. If we can apply the theory for private industry (dislocate middle class, in return for cheaper consumer goods for others) can't we apply the same principle for government programs and budgets?
I do not advocate retaliatory traiffs and restraint of trade.
The point I am trying to make, perhaps badly, is that there are industries with which we could not live, with the same quality of life we now enjoy. Many of those industries are losing out to foreign competition, some are simply too hide-bound to adopt to changing business enviornments, and so, they take the easy way out and stiff their workers. While that may increase the profitability of the company and give consumers lower prices, it also works to eliminate employment opportunities, lower wages and ensure that when we might need them, there will be no more steelworkers, auto workers, or even plastic ashtray producers left.
Oh, and by the way, creating large numbers of service-sector jobs that pay minimum wage to replace manufacturing or professional positions that pay a much higher one, eventually pays dwindling economic returns.
I never claimed to be a pencil maker. We used to have those in America you know. I tend to remember that they used to break less easily too. Probably because the wood was of a higher quality. That's ok. They are so cheap now, we can throw them away and buy another at Wally World.
Anybody here have a Wal-Mart appliance built in China that actually works 5 years later with continual usage? You are a lucky one. It's cheaper though. Cheaper means better. In fact, let's all go to Taco Bell for the value menu, it's much better than the locally grown produce, or the grass fed beef anyways. It's cheaper I tell you.
What the heck is "the American dream?"
Dead on target. TANSTAAFL.
My bad. I figured, the soft-woods debate, "Alberta" and the fact that you post on a host of hockey threads (when we have 'em, that is. And please, pity my Devils!) and made a leap of (il-)logic.
mea culpa.
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