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 ...
“While they can spend dollars with most other countries, eventually they must return to us for an exchange of their hoarded dollars.”
This statement is completely false. First, and exchange does not mean spending.
Second, there are many banks outside the US that will exchange money. None of the hoarded dollars have to come back here.
Consider it not reported. Duly noted, but not reported. LOL!!
Great! We can print billions of dollars very cheaply, exchange them for cars, TVs, oil etc and the silly foreigners never return them to buy our stuff. Sounds like an easy win for us.
“Aside from self-esteem issues, if you could get everything you wanted and needed for minimal costs, how much work would you pursue? My guess is, is that unless you view work as fun and more satisfactory than leisure, you would prefer to work less and have the income enough to pay for cheap goods? Am I correct? Work (time spent earning an income) is a cost in order to consume and live.”
Your premise here is wrong. You presume that the person you are talking to is able to make the same amount of money and that with cheaper goods, the person will simply choose to work less.
There are 3 million people who lost their jobs in order to bring cheaper goods here. That results in them having to find cheaper ways to live. That results in them purchasing products overseas, which results in less money in our economy which results in fewer jobs created, less well paying jobs, which results in more people needing to save money, so they purchase cheap stuff overseas, which results in lower paying jobs, and loss of some higher paying jobs, which results in more people needing to find ways to save moeny, so they purchase more from overseas, which sends more money out of our economy, which results in lower paying jobs and/or loss of jobs which results in more people needing to save money so they purchase cheap stuff from overseas, which results in less money in our economy....
Me too. I guess we don’t have any meth addicts on those threads.
But what do those banks do with the dollars?
“Wrong! We became a wealthier nation through trade.”
How can we become wealthier through trade when more and more dollars are leaving our economy and going to other economies?
Your statement would add up if we had a balance of trade. We don’t. We are not becoming wealthier, we are becoming poorer. You do not get wealthier by reducing the amount of money you have to invest. You get wealthier by increasing the amount of money you have to invest.
Then why is real GDP rising?
As a country, we don’t act as if we’re at war at all. Right after 9/11, Bush told everybody to go out and spend like crazy, as if nothing had happened. Our professional military is expected to do its job, but no one else makes any sacrifices. The dopes in Congress continue to spend our money on unconstitutional wasteful programs, and the dope in the White House signs all their spending bills.
Sometimes, yes. I doubt many software programmers in the US in the 80's considered their jobs exportable but of course they were within the decade. Maybe it'll be the case with university professors next decade, who knows?
I am all for free trade, but buying products and services from societies which are not free in ways similar to ours is not free trade in my book. From the article:
If you’re forced to pay $20 an hour to an American for goods you could have bought from a Mexican for $5 an hour, you’re being extorted.
...except where doing so leads to you having to pay ever higher taxes to educate that foreigner's kids in your schools; who then form gangs and kill your children....or where buying cheaper goods from China gives them the money to build up a military to destroy yours and subjugate your country. Then it's not extortion: it's actually a pretty good idea.
There are 2 sides to trade, the dollars you spend and the goods you receive. LOL!
We are not becoming wealthier, we are becoming poorer.
What do you do with the dollars you earn? Do you eat them? Or do you use them to buy food?
“Of course economic actors — through government — create the rules of the game. After the rules are made, tweaked, examined, and then finally honed to provide faith, trust, and consequences for not living up to contracts and terms, then the government should be hands off the outcomes, no?”
Not “economic actors”, Government. The rules are made by the Government, they then are NOT tweaked, they are NOT examined, they are NOT honed and they darn sure do NOT provide faith, trust or consequences for anything.
Anotherthing, the government does NOT take a hands off approach of the outcomes. They take a hands ON approach which, again, is part of the problem.
I do not see how you can find this a good thing when people lose their jobs because we have so much regulation and taxes. Yet when someone points out that other countries, like China, have no regulation or taxes on their products, you presume the person is for regulation and taxes. Your response was for them to trust the markets. How can anyone trust the markets when the deck is stacked against us because of our regulations and taxes. You conveniently responded that the person you were referring to must be for regulations and taxes in this country, because they talked about no regulation in China. Did it ever occur to you that they were referring to the problem being caused by our regulations and taxes, not the lack of in China?
“The issue is concentrated harm vs. diffuse gain. It’s an easy issue to demagogue for the anti-free-traders, and hard to defend in a sound bite. But what it amounts to, is the economic gain of the society, in the aggregate, is much greater than the economic harm to a smaller number of people spread out over the society.”
There is no economic gain for the greater society. We have a trade deficit. That means our economy is losing money that is being sent overseas because we are importing (money going overseas) much more than we are exporting (money coming into this country).
In other words, those who are losing their jobs are NOT losing them for the greater good, they are losing them for the greater loss.
“So a higher GDP, greater overall wealth, increasing standard of living and a larger selection of goods (among other things) is a bad thing?”
None of these things are brought about by trade. They are brought about in spite of the trade agreements that we currently have.
Your argument is that if you are in a better position than you were yesterday that everything is ok. The problem with that is that yesterday was the day before payday and today is payday and anyway you look at it, we are spending, regarding trade, more than we are bringing in.
“Obviously you have not purchased carbon credits.”
I don’t buy into pyramid operations either.
Are we just donating that money, or are we getting things for it? When I buy something that's imported, it's because I've made the judgment that I would rather have the product than the money I'm spending. When I buy a less-expensive imported product instead of a more-expensive domestic product (assuming similar quality, etc), I benefit by the amount of the difference in price. Multiply this by billions of transactions per year, and our society benefits a great deal.
A trade deficit doesn't mean we're "losing" money. It means we're spending it.
And trade deficits are evil, right?
Because trade is bad, correct?
Only farmers benefit from food, because they sell it. Buyers of food lose, because they're spending money. /idiocy off
You ever get the feeling the people we're discussing these topics with have never taken a basic econ class?
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