[DannyTN]

Freedman's assumptions about free trade were wrong.

1) He assumed dollars would eventually come back to the U.S. to buy trade goods. Instead they are coming back to buy U.S. manufacturing firms and know how and U.S. debt.

2) He assumed that unemployed would always be able to find other productive employment. And while the economy's labor markets do try to find a new equilibrium, we are now at the point that we are off-shoring jobs faster than we are creating new ones. Unemployment is growing. Real wages have stagnated since we lowered the import tariffs in the 1960's. And now we are seeing real wages fall.

"John Hawkins: Let me ask you about this — what do you say to people who claim that free trade will eventually lead to high unemployment in the US as large numbers of jobs move to cheaper labor markets overseas?"

"Milton Friedman: Well, they only consider half of the problem. If you move jobs overseas, it creates incomes and dollars overseas. What do they do with that dollar income? Sooner or later it will be used to purchase US goods and that produces jobs in the United States."

The stores are full of Chinese made goods and Americans are unemployed. Thanks Freedman.

[cotton1706]

I haven’t been a free trader since I read Pat Buchanan’s book The Great Betrayal.

As tariffs have gone down, income taxes have gone up. I’m for a revenue, not a protective tariff, basically a cover charge to get into the American market. Say, 5-10%, which is not a “trade barrier” but a cover charge.

I’m sure the Smoot and Hawley argument crowd will be parachuting in in 3...2...1...

[St_Thomas_Aquinas]

Freedman's assumptions about free trade were wrong.

If tariffs are beneficial to countries, in the aggregate, why don't we establish tariffs between the states?

[Lurker]

Your error is in thinking that we have “free” trade now. We don’t. What we have is fascism being called free trade.

[RinaseaofDs]

China’s on the verge of revolution because of the middle class demanding higher wages. Poor people who make nice things for rich people eventually develop an appetite for the things they make.

Friedman was right, and Japan and the Asian Tigers were only the latest evidence of how the market always seeks to balance an imbalance.

Used to be Japanese labor was cheap. Used to be that Indonesian, Vietnamese, and Malaysian labor was cheap. Used to be you could move your back office to India and save money without losing quality (yeah, right).

What happened? Only the very thing Friedman was talking about.

Get this correct - Americans are out of work because US companies cannot repatriate foreign profits without losing their shirts.

We have the highest corporate tax rate in the developed world.

That, and only that, is the reason why the jobs aren’t coming back, because there are a lot of jobs that left the US in the 90’s that are beating down the door because of the hammering those companies took shipping them over in the first place.

Fast, good, or cheap - you can pick only two. Introduce a disruptive technological improvement and you can have all three, but only until the patent expires, or you sell the rights for others to use it.

[1rudeboy]

"(T)he supporters of tariffs treat it as self-evident that the creation of jobs is a desirable end, in and of itself, regardless of what the persons employed do. That is clearly wrong. If all we want are jobs, we can create any number -- for example, have people dig holes and then fill them up again, or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs -- jobs that will mean more goods and services to consume."
--Milton Friedman