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.
40-50 years ago, the U.S. was the only industrialized country in the world with its industrial capacity and public infrastructure intact. If that strikes you as a "normal" state of existence, then it's time for the U.S. to start leveling every city on the planet other than our own.
Ah yes the good old totally irrelevant national defense strawman. . So I take it you're in favor of tariffs?
The fact remains that proping up some industries with tariffs does far more harm than it does good. Kind of like taxes used for wealth transfer in general. The recipients of the government's stolen largesse are better off, but the many whose pockets were picked to provide it are that much the worse for the experience.
Really? Was there an atomic war in 1956 or 1966? Gee, maybe I should get out more! lol
You need to reread the article. The word free is not there.
Japan's living standard is lower than the country that serves as its primary export partner (the United States). That's the only one that really counts.
If you think a billion people in China are buying Toyota Camrys and Sony televisions made in Japan, you're delusional.
Half-truths. What do we really trade? What real goods do we export? Some soybeans maybe? The half truth part is true enough and if we really traded would be all true. But things are assumed that aren't so, and assumptions should be questioned. In another W.W. article, he wrote on the same topic and offered that what we export is capital. We don't produce stuff and trade it. We borrow money and spend it. We borrow money, send it abroad for foreign goods, they take that money and buy T-bills, Real Estate, set up Toyota factories. We get stuck with the debt. We should be the owners of real capital and benefit from dividends. Instead, we are debtors competing with foreigners for low wage jobs to pay off debts that were incurred to purchase a high lifestyle from foreign real capital and security capital.
I don't agree that all tarrifs necessarily constitute cynical protection of jobs. I think tarriffs set up properly serve to couple economies with dissimilar attributes much the same way a transformer can take 110V that is not useful to run some appliances and and step it down to 12V that is. Wantonly removing all tarriffs is like removing all transformers; the result is inappropriate voltages in the circuit. It would be like a bad electrical engineer insisting the more current that goes to the speaker, the better, oblivious to the fact that small wires are in the speaker and will heat up quickly and melt, destroying the voicecoil. We are metaphorically doing the same thing economically. As it is appropriate to limit the amount of current in a wire, it might be appropriate to limit how easy it is to have foreigners do a job, especially when it is being paid for by increasingly indebted Americans. American economists should design the U.S. economic policy so that goods and services flow and pay for each other in the U.S. first, produced by our capital. Then, trade with foreign nations' goods and services with our tradable goods and services, and use money to adjust for trade imbalances. Undoubtedly, unreasonable bureaucracy and regulation makes it too expensive to employ American lathe workers (for example). Remove those uneconomic controls and let the free market determine prices; then prices are likely to drop and make it easier to employ Americans again. Why is it the same people who scream for the removal of tarriffs remain silent on the issue of uneconomic regulatory controls in the U.S?
PS. to get back to the British Empire model:
If the British Empire operated at a net deficit, it would never have lasted as long as it did, and in the end, that deficit was money the English people owed TO THEMSELVES! There were no Indian or Egyptian millionaires reaping the benefit of the silk or cotton trades. No Malays making a killing on the bauxite or oil markets. No Rhodesians drawing dividends on investment in the argricultural sector. The Empire served to produce raw materials and buy finished products, and this was the basis of the British EMpire almost from it's inception. In this regard, the higher-paying jobs, and thus, the higher standard of living, was always to be found in Britain.
"Alberta's Child" is a witty little song by Canadian country music legend Ian Tyson -- in which Tyson sings about the peculiar characteristics of Alberta cowboys (as opposed to cowboys in Texas or people from other parts of Canada).
For this statement to be true, more than 50% of the American population would have to be homeless.
Many young people are not economically able to leave the nest and there is no such thing as a living wage or a one wage earner family for many college grads, much less the lower to middle class American family.
There is such a thing. It's called driving a used Escort in lieu of a new Mustang, cooking the cheaper cuts of macaroni instead of dining out, living in a less-than-trendy zip code, and saving and investing instead of running up credit card bills. I know 22-year-old college graduates who are supporting a family on one income--in California, no less--and they are building real wealth.
When I was growing up it was a given that every year a family bought a new car and could easily afford a yearly vacation.
I don't know when you grew up, but I suspect I've been around a lot longer than you. I didn't buy a new car every year, nor did my father, nor did any member of my family. Buying a new car every year has always been a fast track to bankruptcy.
Americans are charged three times or more the going rate on medicine and goods.
And you know this because...?
Everyone's electric bill is almost as much as their house payment.
Where the f*** do you live, lady? I live in the one county in California that doesn't have electricity rate caps, and my bill is only about $60 a month. You can't get a two-hole outhouse in Descanso on $60 a month unless you're talking a 100-year mortgage!
No you didn't. My point was that even for a simple product like a pencil there are a whole host of industrial processes going on in the background that renders it impossible for the individual to produce one in isolation. And there isn't anything wrong with Walmart. I for one don't shop there because they never have anything I want, but for those who find their goods and prices suit their lifestyles go for it. Take for example a simple electric drill. You can pay $300 for a Porter Cable at Home Depot or you can pay $10 for a cheap one at Walmart. If you only need the $10 one, why buy the $300 one?
Cheaper is better if all you have is the price of a cheap one.
Here's a better example. We shouldn't buy any foreign oil at $60 a barrel, let's use only American oil, even if it costs us $200 a barrel.
Every European and Asian power was still recovering from World War II in the 1950s and even into the early 1960s. By the early 1970s the U.S. had lost its unique position in that regard.
Do you think it's a coincidence that Japanese auto manufacturers started making serious inroads in the U.S. auto market at that time?
Bump to watch the pitchfork brigade make fools of themselves as usual.
Oh, sure, during wartime we won't be able to import the sugar for our cereal and we'll have to use aspartame. You'd like that, wouldn't you?
Besides, Willie Green said higher priced sugar was necessary to keep our sugar cheap and readily available.
I took a liberty in expanding the argument. In the end, Williams is writing something, if taken to it's logical conclusion, that would state that self-sufficiency is something to be avoided if the pain in reaching that goal is too great.
The examples of coffee, cocoa and spices, in this regard, is a very bad one. People could live reasonably well without any of them. Try living without steel, electronics, concrete, plastics and a host of products produced through heavy industry, which is increasingly disappearing in this country. The industrial base that produces many of the products we depend upon, but never think about, is leaving these shores, never to return. In the event that our trading partners (in some cases, potential enemies) deign it necessary to trade with us, they will.
When it no longer suits their purposes to do so, they will cut off the flow, and we'll all be up the creek.
"Tea grows better in India."
"In case something bad happens."
Not to worry, FYI---there is an island off the coast of NC (forgot the name)that has the climate needed for tea and a good deal of it is grown there. People clamor for this American tea.
Some of us farmers and ranchers grow tons of "tea." Technically, it's known as various infussions, but sometimes better than tea. Catnip, catmint,camomile, (these make one sleepy) choclate mint (tastes just like a York Mint Pattie), pineapple sage, etc, etc. There's almmost no flavor that a substitute has not been found for. Then there's Mormon Tea. It grows wild here in TX and is as good as tea. There are "coffee bean" trees that grow all over KS. The pioneers used them for coffee. There's also chicory for coffee. In LA they mix it with coffee and some won't drink coffee without it. For chocolate there's carob (my family can't tell the difference and it doesn't have the heart stimulants of Cocoa) For anyone who wants the stimulant, there is sasparilla root. People here used to drink it every spring as a "spring tonic." It's now against the law to sell it, due to that, but one can grow their own. It's what gives root beer it's flavor only now that flavor is made artificially, but the leaves are still made into what is known as file gumbo and used to make authentic gumbos. Sugar can be make from maple syrup and a number of other plants. Pepper is probably the least of our problems. So much pepper is grown in TX, that we have to plow most of it under.
I'd venture to say that we can find a good, or better,substitute for almost anything since we've been doing it for thousands of years. The only thing we now seem to lack is old fashioned "Yankee can do."
No, the rest of the world was still rebuilding from the Second World War during that time.
Hell, I visited Japan in 1968--they were STILL cleaning some stuff up, 23 years later.
The point is that the United States could be in a unique position of not needing trade to prosper. With genetic engineering, all of the crops "Farmer" Williams mentions could be grown in CONUS, or at least HI or PR. Exploitation of all oil/gas reserves (including ANWR) and the coasts, along with a synfuels program involving coal, would make the USA energy independent. No more relying on the goatlovers for much of our energy. All we'd need to import are odd, boutique elements used in aerospace, and a few ancillary food items (where's my caviar dah-ling?)
By the way ....on sensitive areas. If you say that (and most people who take such a bent are either complaining about leakage of 'sensitive' stuff, or protecting industries like steel), then exactly what do you consider sensitive? I don't know whether it was you or another freeper, but someone mentioned importing computer chips from Taiwan for our missiles. The thing though is this ....the stuff that is truly sensitive is not coming from Taiwan or China etc etc etc. A 'missile chip' coming from Taiwan will not sink the US. Now, take the modules for the AESA radars used in the F-22 Raptor. You will not see those things coming from Taiwan. Goodness, Japan had difficulties making an AESA radar for their F-2s (not to be confused with the F-22 Raptor .....the Japanese F-2 is basically an F-16 on steroids), and Russia still has issues with cranking out PESA radars (yes, I know Russia has the NO11 Bars that is quite powerful, but it is not even worthy of bowing to ANY of the AESA radars that we have .....it is simply a normal radar with extra wattage). Just because Taiwan is providing cmputer chips doesn't mean that they are anywhere near taking over ANY of our really sensitive areas (goodness, China had to buy engines for its new J-10 from Russia because they couldn't make them in-house. They had the darn things and couldn't even reverse-engineer something that worked well. Now what chance would they have with the highly-advanced super-cruise engines used in our F-22s if they are having trouble reverse-engineering the Russian engine design (which is not that advanced, but too advanced for China at this stage).
Point: Just because a nation like China can reverse-engineer a microwave oven for a tenth - no, a hundredth - of the cost, or a TV, or even a motor vehicle doesn't mean that they can do that to just about anything. Also, even if they can make something that is similar to what we have doesn't mean that it is anywhere near the same level.
So when it comes to 'sensitive' areas one has to realize that things are relative. For instance there was an outcry when only one source for rare-earth magnets (used in some military applications) was to be found in the US, with everything else outside. It may seem like it is a problem, but in all reality it is not. Case in point: If China is making some chip that is used in the AMRAAM is not a worry .....what WOULD be a worry is if China was being able to crank out an entire F-22.
Anyways, I am curious as to what you would want to have in place of Free Trade (and if it is the most probable answer ....i.e 'Fair Trade' then please explain what you mean by that, because i have realized that different people have divergent understandings of that term). Are you seeking protectionism (whether full or partial), or something else.
Please explain and I'll get back to you (if not today then tomorrow morning). Thanks.
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