Posted on 03/17/2016 1:15:58 AM PDT by Cincinatus' Wife
Donald Trump and his fellow liberals Hillary Clinton and Bernie Sanders are lambasting free trade as the scourge of the American working man. How odd it is that an economic activity so beneficial to almost every American, indeed to the vast majority of the human race, suffers such attacks with only half-hearted defenses raised by politicians who should know better and economists who do know better.
I stipulate: in trade, as in any economic endeavor, there are losers in the short run. Capitalism is, after all, fundamentally a system of creative destruction. But if there is any area of agreement among economists of all political stripes — a group among whom finding agreement is exceptionally difficult given their unique decision-making anatomy — it is that free trade provides large net benefits to the societies that engage in it, even if other nations do not lower trade barriers to the same degree.
Furthermore, the benefits of trade accrue in large measure to the lower economic echelons of society in an extension of Schumpeter’s profound observation that “the capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.”
Allow me to offer a few quotes (emphasis added) from one prominent economist, at the time a professor at an elite university, who was lamenting the poor understanding of international trade in the United States:
(Excerpt) Read more at spectator.org ...
Maybe he was just bought. He runs a think tank in D.C. in addition to writing books.
I posted some figures on this subject on another thread a few days ago. Turns out the peak of U.S. manufacturing employment was in the late 1970s during the Carter administration. Most people who were alive back then will tell you that it was the lowest point of this country in their lifetimes.
It is my career, for 40 years now
“The U.S. has run up trade deficits with countries that are no threat to us at all.”
Like many issues it is matter of degree. It is of no consequence if we run a major deficit with Costa Rica. It is a whole different matter with China. Particularly when they have decided to build a blue water navy and turn coral islands into aircraft carriers.
“That’s the only reason a silly term like “Arsenal of Democracy” ever meant anything in the first place. “
I take it your knowledge of American industry’s role in WWII is on the meager side. The Pentagon still maintained offices dedicated to keeping tabs on our industrial ability in the 60s when my father was stationed there. Maybe no one cares anymore, the invisible hand will defend us.
” Most people who were alive back then will tell you that it was the lowest point of this country in their lifetimes.”
I was working then. Didn’t care for Carter one bit. But if you had a job it was better than if you didn’t, something ignored by those indifferent to the hollowing out of American manufacturing. And of course once Reagan took office and the foolish price controls of Nixon and Carter were gone those businesses were able to prosper. Except maybe for oil and gold which took a beating.
Yeah? So what books do you recommend on the subject?
one , perhaps the top of the list “The School of Hard Knocks”
I would recommend reading every issue of Forbes from cover to cover
I have since about 1970
Let’s hear an actual book. What authors writing on trade do you follow?
Then you must be familiar with some writers on trade issues. Which ones come to mind?
Hey look I am not theoretical...... i’m in it every day, including today.
Books are irrelevant to the real thing
” Unfortunately, Donald Trump censors speech by encouraging violence. “
Your statement is nothing more than Alinskyite rubbish.
And you know little about the US Constitution if you think that peaceful protesting is subversive agitprop intended to shut down free speech.
The United States of America is an empire now, and we don't need to worry very much about foreign military forces. We will eventually collapse the way all empires do: first, by inviting foreign invaders to walk right across our borders ... then, by collapsing from within.
“The United States of America is an empire now,”
An empire with the trade profile of a third world colony whose main product is raw materials. A far cry from the industrial powerhouse that could convert its thousands of manufacturing plants to war production when it was needed.
Of course. A very astute observation!
Moreover, our prosperity will soar when and if we get rid of multiple impediments placed on our economy by Obama and his cronies, not to mention assorted economic poisons left over from FDR's New Deal and LBJ's New Society.
But here's a factor that's seldom commented upon:
If and when the American economy soars and outpaces most foreign countries, we will attract more and more foreign investment, because wise foreigners will quickly see that their capital can earn greater returns in the USA than in their homelands.
In turn, the increased international inflow of capital will give American firms and consumers more funds to buy foreign-made goods.
(They will necessarily buy certain items from abroad, because domestic production in many industries will already be at or near full capacity.)
Therefore, improved prosperity can cause our so-called "trade deficit" to increase, not to decrease. Annual increases of this sort could happen over a few years -- or they could occur indefinitely if the rate of return on capital in the USA continued to be higher than the average rate of return in the rest of the world.
Still, will putative "economic prestidigitators" like Mr. Trump, his advisor Steve Miller, or Clyde Prestowitz be able to understand how our international capital account can be "mirror imaged" by our merchandise account, such that increased American prosperity will likely contribute to an increased imbalance in merchandise trade?
I think the question answers itself.
Some fat slob in a family where nobody has held a job in four generations actually lives better in the U.S. today than the workers -- and even the captains of industry -- in that "industrial powerhouse" you describe. I don't know if that means we're better off today, but you really can't dispute any of this.
So is part of being a “movement Conservative” constantly cutting down Americans and telling them they are stupid and lazy? Or is the stateless globalist way of assuaging their guilty conscious?
I’m not sure what you’re asking me, or why you’re asking it.
Well that’s fair enough. But I would think that your perspective would necessarily be focused on the immediate rather than long term macroeconomic effects, and that’s where the national problem lies. You have to do what’s in the best interest for your firm considering the conditions that you operate in. But those conditions are subject the policies of the countries involved. Japan has never lost an industry that they decided was useful for their economy. They have dropped some when they decided they were no longer useful. But industries like auto parts and consumer electronics where the United States once led remain Japan’s as long as MITI decides that they are useful. We hear people claiming that the Japanese model fell apart when their real estate and stock market peaked back in the 1990s. All one needs to do is look at the cities of Asia compared to the ruin of once great cities like Detroit to see the evidence of who has been prospering who hasn’t.
“Some fat slob in a family where nobody has held a job in four generations actually lives better in the U.S. today than the workers — and even the captains of industry — in that “industrial powerhouse” you describe. “
Yeah, that’s like saying that an American welfare case living in HUD housing is better off than a Roman emperor because he has color TV and air conditioning and Caesar didn’t. Contrary to your claim that argument is very definitely in dispute.
The kind of “free trade” we have now does not benefit the working or rather in our case in the US the non working American.
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