Posted on 10/04/2007 7:07:18 AM PDT by SJackson
They haven’t seen the effects of too much government control of trade lately (which are much worse than the “unfair” competition they fear), so they think open markets are costing jobs, lowering living standards etc. After a few years of government control, they will see the mistake in their thinking, and opinion will trend back toward favor of free trade.
Temporary self-delusion is sometimes part of the price we pay for self-government. It’s worth it, even though it causes inefficiency at times.
By the way, Pepper Pike is about ten miles from downtown. Would you call that "pretty far out?"
“Do I have a horrible “trade deficit” with the grocery store because I spend hundreds of dollars there every month without them buying a single thing from me?
The term “trade deficit” is deceptive, because it’s not a deficit at all, any more than my fiscal relationship with the grocery store is.”
...until you lose your job because of it. Then it becomes rather annoying when you can’t buy food.
That would have been a nice bonus, but was not the purpose of NAFTA. If we had a wall and enforcement, illegal immigration would not have increased and maybe Mexico would have reformed their economy.
Stagnant wage growth for un/semiskilled labor in the US is a fact which will impact the political scene.
If we had a wall and enforcement, our low skilled workers wouldn't have to compete with low skilled illegals.
It would have made sense to incorporate some percentage level of wage parity in our trade agreements.
Please explain what you mean.
The US makes (GDP) over $13 trillion a year. How do you figure we're spending more than that on imports?
“Well, this explains your arguments. Laws are laws whether you want them to be or not.”
If you think that all the economic theories around are laws, then that explains your slavish adherence to something you heard in college or read in a book.
Your arguments are predictable and unconvincing. They’ve been tossed around for years and people are beginning to assess the results. Economists and their followers want the US to pay the price for so-called free trade by opening its markets while many other nations keep their’s closed. The result can be nothing other than what it’s been: great benefits for those who own the factors of production and diminishing benefits for those who provide labor and lower skilled work. This is called efficiency, but one person’s efficiency is another person’s diminishing standard of living.
There are sensible ways to manage trade, but this bogus free trade that rewards some while penalizing others in the US will eventually have the result anyone should have predicted. Your “laws” might just be theories, or they’re being very badly implemented.
No, it's not.
First of all, the grocery store isn’t accumulating wealth and buying weaponry with it that it may one day use against you.
Should gun manufacturers stop selling in the state of New York? After all, those gun sales are taxed and those tax revenues fund the attorneys who file lawsuits against gun manufacturers. That's not a potential harm, but a direct one. According to your way of thinking, they should stop selling guns in states that sue gun manufacturers, since they're helping fund their own demise.
The fact is, the lawsuits would happen anyway. Similarly, what China does or does not do militarily will happen anyway. Lots of other nations trade with China, and they have a lot going on internally as well.
The only stupid thing the US has done with China militarily was to give them advanced technology. (Thanks to the treasonous Clinton gang.)
In fact, our trade with China will tend to discourage them from attacking us. You just don't attack a good customer, since doing so would cut off that income.
The grocery store doesn’t have ideological differences with you that it will press at every turn.
Are you sure about that? And what if it did? How are China's ideological differences an economic harm to the US?
They aren't.
The grocery store doesn’t employ people doing jobs, to the exclusion of those in your household.
Not my household personally, but certainly to the exclusion of those in someone's household. Should the households of those who can't get a job at the grocery store stop buying groceries there?
There is more to the equation, does our GDP support the trade deficit, in a similar manner to your household income supporting your grocery shopping. If the GDP doesn’t support the deficit, bad things can happen, just as if you use your credit card for groceries and don’t have the cash to back it up, you won’t like the result.
You're illustrating the problem with the word "deficit" very well here.
When we talk about a budget deficit, then there is a debt involved. When we talk about a trade deficit, there is do debt. We don't owe China money because we have a trade "deficit" with them. The "deficit" is in the balance between what we buy and what we sell. We don't owe them money.
Comparing a negative trade "deficit" with buying groceries on credit is inaccurate. I have a negative trade "deficit" already with my grocery store, because I only buy there. I don't sell them anything.
On the other hand, my employer has a negative trade "deficit" with me. They buy my labor and knowledge, but I don't buy anything from them.
But in both cases, there is no debt involved. I don't owe money to the grocery store, and my employer doesn't owe money to me.
“I live downtown. I see it everyday. Cleveland is broke, mostly because of mismanagement. But as you note, there are plenty of wealthy suburbs. Why? Because the folks at places like Key and Jones Day and the Clinic earn a living in Cleveland.”
The stratification can be seen in Cleveland. There are wealthy suburbs that the average person can’t afford. These are the places the doctors, lawyers and executives live. Then, further out, you find places the average joe can afford. Wasn’t always that way.
Mismanagement is a huge part, Cleveland is a liberal stronghold. But, there are less and less “average” jobs in the area, so the people in Cleveland, and the near suburbs are poor. No one in their right mind would live in Cleveland and send their child to Cleveland public schools if they had options to do otherwise.
Cleveland has never been worse. If it werent’ for RITA, Cleveland would barely exist.
Go ahead, take another bite... it really is chocolate pudding!
“What that analogy does is illustrate just how truly silly a fear of free trade is. Friedman, of course, knew that.”
As much as some worship Friedman, he hardly had an unbroken string of proven predictions and theories.
Yes, and the grocer, trade deficit analogy is nonsense.
“By the way, Pepper Pike is about ten miles from downtown. Would you call that “pretty far out?” “
And what is the average price of a home there versus the price of a home in Bedford? If you had read my post, you’d have seen my comment about where the doctors live.
How'd he do compared to you? LOL!
It's only a problem insofar as individuals are in debt. That's a problem not of economic policy, but of the cumulative personal finances of buyers. No government economic policy can fix bad consumer spending habits.
The risk, and its consequences, should remain with the creditors who extend credit to shaky debtors.
“The Free Trade Propagandists said that only low-wage jobs would be sent offshore. Then we saw large swathes of technology jobs sent off-shore. The free trade people obviously lied.”
Don’t forget importing tons of foreign technical labor at below market rates to save employers money and end the careers of thousands of American workers, or at best force them to accept lower wages.
Why are there so few Americans going for technical degrees in college? Word gets around.
The ‘brain drain’ from technical subjects into wastes of time like law and forensics (amazing how many young people I talk to or hear about these days that want to do forensic work) is what will ultimately turn the US into a second-rate power, if that is to happen. I sure hope not, but I can’t say I’m optimistic.
Right..... Japanese companies you said it, now understand it.
So you're saying that my 100% negative trade deficit with the grocery store--buying but not selling there--will somehow cause me to lose my job? Please explain.
It's you who have zero understanding. You don't borrow yourself into oblivion to satisfy some free trade theories. That's your recipe for a doomed dollar
The problem with free trade is that most people have forgotten the last part of the free trade credo. Free trade is positive among nations - that are at the same level of economic development. That is, free trade Between the US, Europe, Japan would be positive for all involved. Free trade among areas that are not at the same level of economic development ends in exploitation and conflict.
“How’d he do compared to you? LOL!”
Economist spout their theories as if they should be the ONLY guide in forming policy in the US. There are other considerations, always have been and always will be. When Friedman or any other economists make their pronouncements without taking into account other factors that must be considered in a democracy, they come off sounding like nitwits at times, as do their followers.
And you can always find an economist with an alternative theory.
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