Posted on 04/08/2016 2:15:00 PM PDT by Kaslin
"Trade" has become a dirty word in this year's presidential race, with candidates of both parties bemoaning the American jobs supposedly lost to foreign competition because of our trade policies. Donald Trump has repeatedly threatened a trade war with our most important trading partners, who, he claims, are "killing us." But Ted Cruz, Bernie Sanders and Hillary Clinton all fret about the issue and vow to take a harder stance, as well, if elected. Obviously, the message is resonating with the electorate, which makes it more dangerous still. Is there anything that can be done to reverse this sudden anti-free trade frenzy?
Education on the issue is sorely lacking. Most people see trade as a zero-sum game. If China sells us more than we sell China, it results in a trade deficit -- which must be bad, right? If products that used to be produced in the U.S. by American workers are suddenly being built in Mexico by Mexican workers, that's bad for us, isn't it? Try convincing a guy who used to build auto parts in Michigan that he's better off overall because those parts are now being manufactured in Mexico. It's a hard sell. But the fact is that all of us benefit from the availability of products imported from lower-wage countries; we're a lot better off, as it happens.
Trump says he would raise tariffs on Chinese and Mexican goods; he's thrown around the figure 45 percent for China and 35 percent for Mexico. He seems to believe that if he did so, China would stop manipulating its currency and Mexico would crack down on illegal immigration. But think, for a moment, about what raising tariffs on these countries' goods would mean for the average American, even if Trump were successful in making this move unilaterally with no retaliation against American goods from the governments he'd be punishing (a fantasy).
Most people want to pay as little as possible for goods, provided that the goods meet their expectations for quality. Americans buy Chinese-made clothing -- and increasingly clothing from other, cheaper sources, such as Malaysia and Vietnam -- because they see value in paying less, even if the quality isn't quite the same. You don't expect a Chinese-made silk blouse to be the same as an Italian-made silk blouse, but you pay a lot less on average for the former. It's the same with electronic goods, toys, furniture, lighting and a host of other Chinese imports.
The United States is the biggest importer in the world precisely because Americans crave goods that other countries can produce at cheaper prices than we can at home. If we were to invoke tariffs, American consumers would end up paying them in higher prices, not the Chinese or Mexican government, or else doing without the products altogether.
Like your smartphone? If so, you'd better hope that Trump's trade fantasies don't become a reality. Several countries contribute to the making of an iPhone. It begins with engineers in the United States, but many of them are foreign-born. Rare minerals from Mongolia go into chips and other components. The gyroscopes come from Italy and France, and the microchips are manufactured in South Korea and Taiwan. Assembly mostly happens in China. The gadgets aren't cheap, but they would cost a whole lot more if every part had to be manufactured and assembled in the United States.
International trade is so interwoven into modern life that it is difficult to see how we could do what Trump and others promise, namely bring back American jobs. Though it is true we have far fewer manufacturing jobs than we did a generation ago, much of the reason has to do with gains in productivity in the manufacturing sector, not jobs being shipped overseas. Again, those gains, which sometimes put individuals out of work, benefit everyone at the cash register.
A far better way to deal with the downside of international trade is to help retrain workers whose jobs have disappeared. That way, they can learn the skills still in demand in the United States. We already provide relief to workers whose jobs have been adversely affected by trade agreements -- including wage supplements for certain workers, health benefits and training -- but the programs are bureaucratic and depend on individuals to take the initiative to find new fields of employment and secure needed training.
Politicians' exploiting American workers' fears and anxieties about trade is nothing new, but we should not change policies that benefit the great majority of Americans with lower prices, access to more goods and opportunities for American companies to excel at what they do best, innovating and providing leading-edge products that are the envy of the world.
“I’ll be watching to see if the price of Oreo’s or Carrier Air Conditioners goes down with eager anticipation.”
How does a “conservative” justify interring in the business decisions of a private enterprise? What if Carrier discovered a new manufacturing technology that resulted in similar output with less labor. Should the government ban that technology to save jobs? If it should not, then why not?
“Trade benefits America.”
‘Knowledge is good.’ Faber College motto
Wow. They are so wise as to decide for 320,000,000 individuals with whom for what and at what price to trade.
I guess we know now how Lenin won .... people like you.
“How does a “conservative” justify interring in the business decisions of a private enterprise? What if Carrier discovered a new manufacturing technology that resulted in similar output with less labor. Should the government ban that technology to save jobs? If it should not, then why not?”
If the price doesn’t come down, then corps are pocketing the difference (which was my original point) and the consumer is no better off, be it by offshoring or automation. Unemployed consumers probably won’t care anyway. If corps want to continue exploiting lower costs countries with lax environmental laws, you’re right, how does a conservative justify interfering. Maybe we can’t. But hopefully we’ll figure something out by the time the entire country is an empty shell like Detroit.
Town Hall has completely lost it. It is the HuffPo of the right.
Comments at Town Hall are even harsher than the ones here...LOL
We know trade benefits America, but it must be fair trade!
True.
If only Americans were paid 10 cents an hour, then we'd be competitive!
True!
Retrain them as what? This is the question they don't answer. John Stossel was on Laura Ingraham's show this morning and he uttered the standard "retrain them" line, but didn't offer any ideas about what occupations will still exist tomorrow.
It is those who are making these deals who operate on the lies of trade deficits.
If they want free trade open their borders and we will trade with them.
What the guys who are behind these deals is control of trade, not free trade.
The same way we justify banning the sale of crystal meth, weapons grade radioactive elements or dismembered babies.
The market is a mechanism. We judge what is a moral or practical use of that mechanism and what is not.
“Retrain them as what?”
A few years ago we tried to get that kind of answer out of my employer. We understood some skill sets being off-shored so we wanted to know what was staying so we could train and be ahead of the curve. Never did get an answer because there isn’t one. I have often thought that if executive positions were the first to go, their opinions would be different.
Never ceases to amaze me how many conservatives equate conservative economics with radical libertarianism. My conservatism incorporates the old fashioned notion of the national interest. If something is good for corporate profits but bad for America it's bad and we can stop it. Period. The cheek of the libertarians in claiming the Founding Fathers as retroactive allies in their fight for globalism is something to behold. Tariffs are written into the Constitution! The Founding Fathers opposed pure free trade! They were nationalists, not libertarians!
Just a thought: the USA could: lower the corporate tax rates; reduce the overly zealous rules and regulations; and trim back the out of bounds EPA. And allow the USA to be more competitive. With automation And the above actions the USA could be a good place for manufacturing.
Is the author the same woman that was nominated to be Secretary of Labor and had to drop out because she had an illegal alien nanny or maid? I suppose that benefited America too.
“If corps want to continue exploiting lower costs countries with lax environmental laws, you’re right, how does a conservative justify interfering. Maybe we can’t. But hopefully we’ll figure something out by the time the entire country is an empty shell like Detroit.”
Despite what most liberals believe, corporations do not exist to provide jobs. They exist to make a profit for their owners.
Yes dimwit, trade benefits America ...FAIR TRADE. Not the $hit you’ve been falling for as fair or free.
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