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What to Expect When You’re Free Trading
New York Times ^ | January 16, 2008 | STEVEN E. LANDSBURG

Posted on 01/16/2008 4:01:09 AM PST by LowCountryJoe

Rochester

IN the days before Tuesday’s Republican presidential primary in Michigan, Mitt Romney and John McCain battled over what the government owes to workers who lose their jobs because of the foreign competition unleashed by free trade. Their rhetoric differed — Mr. Romney said he would “fight for every single job,” while Mr. McCain said some jobs “are not coming back” — but their proposed policies were remarkably similar: educate and retrain the workers for new jobs.

All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to? Does it create a moral mandate for the taxpayer-subsidized retraining programs proposed by Mr. McCain and Mr. Romney?

Um, no. Even if you’ve just lost your job, there’s something fundamentally churlish about blaming the very phenomenon that’s elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?

[Snip]

One way to think about that is to ask what your moral instincts tell you in analogous situations. Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? When you eat at McDonald’s, should you compensate the owners of the diner next door? Public policy should not be designed to advance moral instincts that we all reject every day of our lives.

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; Editorial; Government; Philosophy
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To: fortheDeclaration

The Merchantile class is sales based, not manufactiuring based. It relies on low duty importation of desirable goods for resale to its clientele. Similarly it relies on exportation of locally produced goods in trade for foreign goods. N’est-ce pas?


21 posted on 01/16/2008 5:55:51 AM PST by Louis Foxwell (here come I, gravitas in tow.)
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To: mysterio; LowCountryJoe
In all honestly, if we were dealing with a "level playing field" worldwide, I would have no problem with the global marketplace.

When China, for example, has to pay benefits for all their workers and match their 501K withholdings, and strict pollution controls hobble their factories, and GOSHA dictates that all workers must have expensive safety equipment and can only work an 8-hour shift, and all those workers can no longer be warehoused in cramped flophouses, and both countries treat each others' exports exactly the same in terms of tariffs, inspections, government interference etc, and we are sending just as many container ships full of jeans and electronics to China as they are sending to us, THEN and only then will we have successful globalization. And I'll gladly put on a pair of Wen-Ho jeans with a Bluck knife in the pocket. Yee-hao, pardner!

Or OTOH we could completely deregulate like China, let factories belch pollution and kill off their disposable employees for y25/hour. Either way, at least it's fair.

Get back to me when either of the above gets done.

22 posted on 01/16/2008 6:00:49 AM PST by Sender (Feel like, I feel like a poke chop san'wich)
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To: calcowgirl
All economists know that when American jobs are outsourced, Americans as a group are net winners.

Besides the fact that we have MANAGED trade, not FREE trade, the leftists and "free traders" goals are not only to create the demise of American jobs.....they want to MANAGE American education. This was initially done through the outcome-based education, GOALS 2000, and currently, through the No Child Left Behind Act (NCLB), which has shifted the PURPOSE for educating our children. They are to become TRAINED, not educated. We see the poor results of the implementation of these "economic gurus" not only through the outsourcing of American jobs, but the lowering of American students' education. Our children are being trained to be nothing more than laborers in a global economy....no longer EDUCATED to have basic knowledge and skills.

Final Regulations Issued for No Child Left Behind
January 2003

Some experts assert that NCLB [No Child Left Behind Act] represents the final takeover of American education by the federal government, a process that began in 1994 with the passage of the Goals 2000 and School-to-Work laws. Sue Ella Deadwyler, education researcher and editor of Georgia Insight, points out that "the Constitution of the United States leaves control of education to the respective states. . . . NCLB is said to be 'voluntary' but uses this directive: 'Each state educational agency that desires to receive funds under this subsection shall submit an application to the Secretary. . ." If the state doesn't comply with the mandates, education funding will be withheld.

* * *

This is top-down control of America's public schools as envisioned by Marc Tucker in his 18-page letter to Hillary Clinton in 1992.

***

School-to-Work Will Train, Not Educate
April 1997

The School-to-Work Opportunities Act (STW), signed by President Clinton in 1994, is an attempt to use federal mandates and funding to browbeat the public schools into changing their mission. STW is being implemented nationwide by STW state laws, federal and state regulations, and the federal mandates that control the granting of federal STW funds.

School-to-Work is the implementation of Marc Tucker's "cradle to grave" plan outlined in his "Dear Hillary" letter, and it is moving rapidly through the schools. Tucker boasts that he has written the "restructuring" plans for more than 50% of public school children. Designed on the German system, it is a plan to train children in specific jobs to serve the workforce and the global economy instead of educate them so they can make their own life choices.

The traditional function of education was to teach basic knowledge and skills: reading, writing, math, science, history, etc. School-to-Work deemphasizes or eliminates academic work and substitutes mandated vocational training to serve the workforce. Instead of the focus being on developing the child, the focus is on serving the labor force.

There's a big difference between educating a child and training him to serve the workforce. According to the dictionary, to educate means to develop the faculties and powers of a person by teaching. Becoming skilled at reading, writing and calculating is essential to developing as a student and as a person and being able to fulfill the American dream. To train means to cause a person or animal to be efficient in the performance of tasks by responding to discipline, instruction, and repeated practice. That's what you do to your dog. That's what School-to-Work is: "performance-based" training of students to move into predetermined jobs.

Those predetermined jobs will not be selected by the student or his family....

* * *

School-to-Work is a direct threat to the individual student, his privacy, his goals, and his acquisition of an education that can help him reach them. Furthermore, a planned economy, with bureaucrats trying to predict what jobs will be needed in the next five years and training students for specific jobs, is a failure all over the world...

Robert Reich, Ira Magaziner, and Marc Tucker are the social engineers driving the School-to-Work concept. They dream of using the schools to implement industrial policy, a.k.a. national economic planning, following the German and East European models.

Robert Reich's and Ira Magaziner's 1982 book entitled Minding America's Business bemoans America's "irrational and uncoordinated industrial policy" and that we lack a single agency to monitor our domestic economy and adjust it to changes in the world markets. They think we need an economic czar.

Robert Reich, in his 1983 book The Next American Frontier, wrote enthusiastically about Germany and Japan, where government-managed industrial policy uses loans and subsidies to shift resources into favored industries, and "induces" disfavored firms to exit from the industry. He praised the high percentage of their national economies that is poured into numerous, generous, tax-financed social benefits and "elaborate programs of job training," which he claimed resulted in low unemployment.

Marc Tucker, in his 1992 book Thinking for a Living, expressed admiration for the Soviet bloc countries. He wrote that they "have done a better job than we of building human-resource development programs."

The alleged economic efficiency of the German and Eastern bloc countries, so highly praised by Reich, Magaziner and Tucker, is now on the rocks. Germany's unemployment rate is 12% [2003 | 9.80 %; 2004 | 10.50 %; 2005 | 10.60%; 2006 | 11.70%; and 2007 | 7.10 %] and the extravagances of the welfare state are heading that nation into economic decline.

School-to-Work is the "human-resource development" segment of the Reich-Magaziner-Tucker strategy to inflict America with a national industrial policy dictated by government economic czars. These elitists have convinced themselves that they possess "extraordinary insights" to restructure our economy. But central planning is a failure everywhere in the world!


23 posted on 01/16/2008 6:01:57 AM PST by nicmarlo (I hereby declare my support for Duncan Hunter. 1/10/08; late to the party, but I have arrived!)
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To: Sender

My bad, I meant to say y25/day wages. What was I thinking?


24 posted on 01/16/2008 6:03:08 AM PST by Sender (Feel like, I feel like a poke chop san'wich)
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To: hellbender

“None of them have ever lived through war or other crisis.”

I was under the deluded impression that we are currently at war. I better adjust my thinking.


25 posted on 01/16/2008 6:06:08 AM PST by CSM ("Dogs and beer. Proof that God loves us.- Al Gator (8/24/2007))
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To: Toddsterpatriot

Ping to the best defense of free trade I’ve seen in a long time...from the NY Times no less.


26 posted on 01/16/2008 6:08:23 AM PST by xjcsa (Thompson/Romney 2008)
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To: CSM
I was under the deluded impression that we are currently at war. I better adjust my thinking.

We are not at war in the traditional sense. This is more like a police action.

If we were at war in the traditional sense would we be selling arms to the next door neighbor of our enemy?

27 posted on 01/16/2008 6:09:35 AM PST by raybbr (You think it's bad now - wait till the anchor babies start to vote!)
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To: calcowgirl; DWar

Ping to a free trade article; thought it might interest you.


28 posted on 01/16/2008 6:09:47 AM PST by xjcsa (Thompson/Romney 2008)
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To: raybbr
Where have those lower prices been lately re: Food and energy.

Food prices have been distorted by the government-mandated ethanol scam, thus helping prove the author's point. As far as energy prices: where do you think gasoline prices would be if we didn't allow oil imports?

29 posted on 01/16/2008 6:11:30 AM PST by xjcsa (Thompson/Romney 2008)
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To: processing please hold; FReepapalooza
ping to this thread, the writer's statement "All economists know that when American jobs are outsourced, Americans as a group are net winners," and my post #23.
30 posted on 01/16/2008 6:12:38 AM PST by nicmarlo (I hereby declare my support for Duncan Hunter. 1/10/08; late to the party, but I have arrived!)
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To: processing please hold; calcowgirl; FReepapalooza
Exporting America: false choices
Lou Dobbs | March 10, 2004

...in none of the attacks on my position on outsourcing has a single columnist or news organization seen fit to deal with the facts.

Number one: We're not creating jobs in the private sector, and that's never happened before in our history. Our economists and politicians need to be coming up with answers, not dogma.

Number two: We haven't had a trade surplus in this country in more than two decades, and our trade deficit continues to soar.

Number three: We've lost three million jobs in this country over the last three years, and millions more American jobs are at risk of being outsourced to cheap overseas labor markets.

That seems to me, at least, to be more than sufficient evidence for all of us, Republicans and Democrats alike, to question critically the policies of both parties that have led us to this critical juncture in our economy and our history.

Exporting America: An Interview with Lou Dobbs
February 2005

It began really with the collapse of the telecom and communications bubble in 2000. The corporations took advantage of a digital universe to start moving jobs overseas to cheaper labor markets, and then expanded from there -- to what's now an estimated 400,000-500,000 jobs a year being exported to cheap overseas labor markets.

Online list of outsourcers

New Awakening About Free Trade
April 2007

For years we've been told that it's OK for our manufacturing jobs to be outsourced overseas because the United States will always keep the technology, engineering, innovative, service-industry and white-collar jobs. Even when service-industry jobs began to be outsourced, we were told, those are just low-skill tasks like answering customer inquiries.

It turns out that was all a lie. The high-skill and technical jobs are also rapidly moving overseas, especially to India.

* * *
Follow the money, of course, explains this massive shift in jobs. It's cheaper to hire and produce in India than in the United States.

The unhappy results of these policies are now apparent; they richly benefit the corporations but are devastating to the American middle class. Outsourcing reduces good American jobs, our standard of living, our national security, and our world leadership.

This massive change in our economy should be front-page news, but you have to look on the lower half of the inside pages of pro-globalism newspapers like the New York Times to find the facts. It was a real surprise when the Wall Street Journal (always a big supporter of free trade, globalism, and open borders) published a front-page article called "Pain from Free Trade Spurs Second Thoughts."

This article reported that one of the most prominent advocates of free trade, Professor Alan Blinder, now says that free trade can put 30 to 40 million American jobs at risk, mostly from outsourcing.


31 posted on 01/16/2008 6:31:16 AM PST by nicmarlo (I hereby declare my support for Duncan Hunter. 1/10/08; late to the party, but I have arrived!)
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To: nicmarlo

“We’ve lost three million jobs in this country over the last three years, and millions more American jobs are at risk of being outsourced to cheap overseas labor markets.”

Which is a very good thing considering the coming labor shortage that will be caused by the boomer retirements.


32 posted on 01/16/2008 6:41:36 AM PST by CSM ("Dogs and beer. Proof that God loves us.- Al Gator (8/24/2007))
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To: CSM

Glad you think that lower paying jobs, which stay here, are what the next generations deserve. /s


33 posted on 01/16/2008 6:45:09 AM PST by nicmarlo (I hereby declare my support for Duncan Hunter. 1/10/08; late to the party, but I have arrived!)
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To: LowCountryJoe

“All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices.”

Whoopeee! Lets do away with everyone’s job and the world will be perfect!

Strength through total unemployment!


34 posted on 01/16/2008 6:54:43 AM PST by the gillman@blacklagoon.com (And close the damned borders!)
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How Foreigners Cheat Americans on Trade
May 2007

Daniel Drew, the legendary 19th century Wall Street insider, reputedly said that all he wanted in any deal was "a little unfair advantage." Most of America's trade competitors seem to want the same thing, or even a big unfair advantage.

Imagine how it would help the competitiveness of American exporters if U.S. companies could cut their prices an average of 19% in Europe and 17% in Asia. Imagine what it would also mean if foreign imports into the United States from overseas were raised by the same percentages.....

Why U.S. Jobs Move Overseas

Why do U.S. companies relocate their plants overseas, thereby abolishing U.S. jobs? (a) they can hire workers at very low wages (such as 30 cents an hour in China), (b) the companies don't have to pay any employee benefits, (c) they don't have to comply with safety and environmental regulations, (d) they don't have to pay foreign taxes when they export their products back to us.

The correct answer is all of the above. The U.S. cannot require foreign governments to impose a minimum wage or safety regulations, or pay employee benefits. But the U.S. can and should do something about (d), the huge tax-rebate racket that lures U.S. companies to lay off American workers and set up shop in foreign countries.

Corporations located in the United States pay big U.S. corporate income and property taxes. It does a lot for their bottom line when they move to a foreign tax-free utopia.

* * *
For 40 years, the U.S. has been signing trade agreements that were supposed to reduce or eliminate tariffs and thereby promote free trade. European countries sanctimoniously proclaim that they are reducing their tariffs, but in fact they replaced their tariffs with a steadily increasing VAT.

In 1968, the average tariff rate collected by European Union countries was 10.4%, and the average VAT rate was 13.44%, making a trade barrier against U.S. goods of 23.84%. By 2006, the average tariff rate declined to 4.4%, but the average VAT rate climbed to 19.36%, making the trade barrier against U.S. products 23.76%.

Foreign countries simply substituted high VAT rates for high tariff rates, thereby maintaining their border barriers against competition from U.S. goods. The result is that most foreign countries still have de facto tariffs against us that are as high or higher than their tariffs of 40 years ago.

Of course, this racket is flagrantly contrary to the announced goal of free-trade agreements. But don't look for any relief from the World Trade Organization because the WTO consistently rules against us.


35 posted on 01/16/2008 6:55:45 AM PST by nicmarlo (I hereby declare my support for Duncan Hunter. 1/10/08; late to the party, but I have arrived!)
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Time To Stand Up for America
June 2007
The Middle Class is hurting today because so many have lost jobs from the outsourcing of U.S. plants overseas. Some of these Americans have seen their good jobs just vanish as their plants closed. Three million good manufacturing jobs have gone to foreign countries. Our government has failed to do anything to protect American workers from the way that foreign governments bribe U.S. companies to relocate overseas, cheat us with their anti-American tax policies, and steal our technology and intellectual property. 200,000 American jobs were lost in Pennsylvania and another 200,000 jobs in Ohio. No wonder Republicans were wiped out in both states in 2006.

Other Americans have lost their jobs because of the insourcing of foreigners to take jobs in our country. Some jobs were taken by low-wage illegal aliens and so-called guest workers. Other jobs were taken by skilled workers coming in from Asia on H-1B or student visas. Our government has failed to secure our borders and has positively encouraged the insourcing of Asian engineers and computer technicians.

The law of supply and demand really works — a bigger supply of cheap labor inevitably depresses wages.


36 posted on 01/16/2008 7:00:48 AM PST by nicmarlo (I hereby declare my support for Duncan Hunter. 1/10/08; late to the party, but I have arrived!)
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Globalism: Enemy of the Middle Class
February 2007

The majority of countries in the world (e.g., Mexico) have two classes: the rulers who are very, very rich and the rest of the people who are very, very poor. The United States is different; we built a prosperous society with a well-to-do middle class and the chance for anyone, based on merit and hard work, to better himself and live the American dream.

Globalism is the enemy of the middle class. Globalism preaches that the world is flat; that nations should have no borders; that labor, capital, goods and services should flow freely between countries. Globalism's mantras are "free trade" and "abolish protectionism." Globalism forces American workers to compete against people who work in other countries for 30 cents an hour without benefits. Competing with such low wages means the end of the American middle class.

Americans relish competition, as our national fixation on sports contests proves every day. But global trade is not played on a level playing field — our opponents don't play by the rules and the umpire (the World Trade Organization) is biased against us.

Middle-class Americans are waking up to how they have been squeezed out of prosperity by the politicians of both parties who were elected with the political donations and other goodies provided by corporations that reap the rewards of cheap labor through insourcing and outsourcing.


37 posted on 01/16/2008 7:03:44 AM PST by nicmarlo (I hereby declare my support for Duncan Hunter. 1/10/08; late to the party, but I have arrived!)
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To: Man50D
American workers are the most productive and innovative labor force in the world. Unfortunately, they are asked to compete in an unfair environment against other workers who make only a fraction of a living wage

Who makes a fraction of a living wage? A dead worker?

38 posted on 01/16/2008 7:05:15 AM PST by Toddsterpatriot (What came first, the bad math or the FairTaxery?)
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To: xjcsa
Food prices have been distorted by the government-mandated ethanol scam, thus helping prove the author's point.

MY eye. Food has been rising for years. In fact, everything has except conumer electronics.

As far as energy prices: where do you think gasoline prices would be if we didn't allow oil imports?

Providing our own oil? Nobody's arguing against trade. We want fair trade. What does Saudi Arabia buy from us?

Wait. Let me answer. Weapons, right? That they will probably ship over to Iraq to fight American soldiers with.

39 posted on 01/16/2008 7:11:13 AM PST by raybbr (You think it's bad now - wait till the anchor babies start to vote!)
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To: Halgr
Over 2 million manufacturing jobs have been lost in America since 2000.

I rest my case.

And yet, we manufacture more than we did in 2000.

I rest my case.

40 posted on 01/16/2008 7:14:23 AM PST by Toddsterpatriot (What came first, the bad math or the FairTaxery?)
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