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Three Cheers for Free Trade
The American Specator ^ | March 16, 2016 | Ross Kaminsky

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 ...


TOPICS: Business/Economy; Editorial; Government; Politics/Elections
KEYWORDS: capitalism; freedom; freetrade; nafta; notfreetrade; prosperity; tpp; trade; trump
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To: Pelham

Maybe he was just bought. He runs a think tank in D.C. in addition to writing books.


161 posted on 03/18/2016 11:15:04 AM PDT by Alberta's Child ("Sometimes I feel like I've been tied to the whipping post.")
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To: Pelham
The U.S. has run up trade deficits with countries that are no threat to us at all. The whole picture changes completely once you recognize the U.S. as an empire rather than a nation. That's the only reason a silly term like "Arsenal of Democracy" ever meant anything in the first place.

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.

162 posted on 03/18/2016 11:21:06 AM PDT by Alberta's Child ("Sometimes I feel like I've been tied to the whipping post.")
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To: Pelham

It is my career, for 40 years now


163 posted on 03/18/2016 11:30:59 AM PDT by bert ((K.E.; N.P.; GOPc;+12, 73, ....carson is the kinder gentler trump.)
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To: Alberta's Child

“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.


164 posted on 03/18/2016 11:32:42 AM PDT by Pelham (more than election. Revolution)
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To: bert

Yeah? So what books do you recommend on the subject?


165 posted on 03/18/2016 11:33:50 AM PDT by Pelham (more than election. Revolution)
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To: Pelham

one , perhaps the top of the list “The School of Hard Knocks”


166 posted on 03/18/2016 11:38:07 AM PDT by bert ((K.E.; N.P.; GOPc;+12, 73, ....carson is the kinder gentler trump.)
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To: Pelham

I would recommend reading every issue of Forbes from cover to cover

I have since about 1970


167 posted on 03/18/2016 11:39:22 AM PDT by bert ((K.E.; N.P.; GOPc;+12, 73, ....carson is the kinder gentler trump.)
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To: bert

Let’s hear an actual book. What authors writing on trade do you follow?


168 posted on 03/18/2016 11:39:53 AM PDT by Pelham (more than election. Revolution)
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To: bert

Then you must be familiar with some writers on trade issues. Which ones come to mind?


169 posted on 03/18/2016 11:41:05 AM PDT by Pelham (more than election. Revolution)
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To: Pelham

Hey look I am not theoretical...... i’m in it every day, including today.

Books are irrelevant to the real thing


170 posted on 03/18/2016 11:42:40 AM PDT by bert ((K.E.; N.P.; GOPc;+12, 73, ....carson is the kinder gentler trump.)
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To: nathanbedford

” 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.


171 posted on 03/18/2016 11:49:28 AM PDT by rbmillerjr (Reagan conservative: All 3 Pillars)
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To: Pelham
Maintaining the industrial capacity to build hundreds of ships and thousands of military aircraft makes might have made sense in the 1960s -- and surely made sense in the 1940s. But it is a meaningless exercise in an age of space travel and intercontinental ballistic missiles.

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.

172 posted on 03/18/2016 3:02:09 PM PDT by Alberta's Child ("Sometimes I feel like I've been tied to the whipping post.")
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To: Alberta's Child

“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.


173 posted on 03/18/2016 7:21:36 PM PDT by Pelham (more than election. Revolution)
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To: bert; Alberta's Child
>> The money from the imbalance is making it’s way back by investment in business and real estate <<

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.

174 posted on 03/18/2016 7:32:15 PM PDT by Hawthorn
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To: Pelham
And yet this "third world colony" has people living in poverty who have the highest standard of living in the history of mankind.

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.

175 posted on 03/18/2016 7:36:58 PM PDT by Alberta's Child ("Sometimes I feel like I've been tied to the whipping post.")
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To: Alberta's Child

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?


176 posted on 03/18/2016 7:41:02 PM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: central_va

I’m not sure what you’re asking me, or why you’re asking it.


177 posted on 03/18/2016 7:44:52 PM PDT by Alberta's Child ("Sometimes I feel like I've been tied to the whipping post.")
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To: bert

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.


178 posted on 03/18/2016 7:45:55 PM PDT by Pelham (more than election. Revolution)
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To: Alberta's Child

“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.


179 posted on 03/18/2016 7:50:06 PM PDT by Pelham (more than election. Revolution)
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To: Greetings_Puny_Humans

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.


180 posted on 03/18/2016 8:00:37 PM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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