Newsweek column on outsourcing

Newsweek ^ | 8-07-2003 | Michael Rogers

[LS]

I see what you are proposing. Sorry. End of story. The scholarship that is out there involves massive regressions on multivariate tariff rates that would simply be ridiculous to try to reprint here. I thought, for a moment, that you were actually interesting in learning something about the tariff. That IS the historical record. You cannot debate one variable without holding others constant, which requires computer regression analyses to perform. So if you don't want to accept the scholarship that is out there---and won't go check it out for yourself, then this whole things was a giant miscommunication.

[harpseal]

Please see my post above on the sources. Begin with Taussig, who merely supplies most of the numbers, but then look at Doug Irwin's new book and Mario Crucini's articles. The best study on the antebellum tariff is Doublas Irwin and Peter Temin, "The Antebellum Tariff on Cotton Textiles Revisited," Journal of Economic History, 61, Sept. 2001, 777-805; and Temin, "Product Quality and Vertical INtegration in the EArly Cotton Textile Industry," (same source), 48, (1988), 891-907. A contrary viewpoint is expressed in C. Knick Harley, "International Competitiveness of the Antebellum American Cotton Textile Industry," (same journal), 52 (1992), 559-584, but then see the comments by Harley following the Irwin/Temin article. The main problem is lack of data prior to 1830, due to the poor collection of reports, but Irwin and Temin conclude that "the u.S. cotton-tetile industry was largely independent of the tariff by the early 1830s." Even after the tariff was drastically lowered---AND IMPORTS SUBSTANTIALLY INCREASED---there was no decline in domestic output, because we made "different stuff" than the British did. Harley tries to explain the differences by claiming the reasearchers were using "different sources" than he was---unpersuasive. (BTW, Temin, if I'm not mistaken, used to be a "pro-tariff" guy). I see no data that shows harm to the US economy from these tariffs. I said the Historical record and all you include are conclusions that agree with you. On Vandy, see Burt Folsom's very readable book, "Myth of the Robber Barons." It's quite well researched. And no, Vandy's triumph was no insignificant. It was quite impressive, as was his victory over SUBSIDIZED businesses every time he contronted them. And this relates to the tariff question how?

As for the late 19th century, Irwin's paper "Explaining America's Surge in Manufactured Exports, 1880-1913" (Review of Economics and Statistics, May 2003, 364-376) shows that natural resource changes, particularly the discovery of the Mesabi iron ore range, accounted for the productivity improvements and price declines, not other factors (especially not tariffs). "However these new technologies were all developed during an age when the benefits of capital investment in the USA were clear because of the protective tariffs." Irrelevent. Has nothing to do with the tariff. They were enacted because it was profitable to do so.

So then we may expect sbetter economic development ion nations taht had natural resources preesent but undeveloped but did not have protective tariffs. That would indicate that the tariff was harmful and no tariff's in place were beneficial but you do not cite this case. You are somehow limited to conclusions and seem to have an aversionb for facts and referecning the hostorical record.

Your comment on Bessemer is interesting. Carnegie did not benefit greatly from the light steel tariff, yet he instantly replaced his furnaces with Bessemer the minute he could, and then outproduced the British, even accounting for the tariff.

Agreed on Andrew Carnegie outproducing the British. I was merely focusing on your discussion of steel as a primary metal of the 1848 period. Clearly steel was made but the arge scale industrial production of steel versus iron did nbot really start until after Bessemer invented the converter which hapened in which happened after 1848.

This cirucular argument that the non-protected areas surged BECAUSE they were not protected is amazing. Indeed, no further comment IS necessary, and I'll leave it to readers to figure out which of the two of us is more logical. There is nothing circular about arguing that protection in one area may encourage investment in another area becuase of confidence that protection may be provided if necessary. Further, when new technology is invented and patents are in place it is clear that such technology provides a clear market advantage.

I'm not going to go through two pages worth of discussions, so keep it to one or two questions---it starts to get too much like teaching. :)When oh when will you stop listing people's conclusions and start actually giving data? Now clearly there is scholarship that has dsrawn opposite conclusions to theis present day scholarship. That other scholarship includes refernces to the actual historical record. I shall leave it to the reader who has presented conclusions. As to facts in 1789 the first prortective tariff was enacted. Protective tariffs were in place from 1789 on. The USA grew massively during that time. I further note that you even pointed out that the USA was competeing with slave wages at that time and that the wages in the uSA went from below those in England to above those in England during a periods when protective tariffs were in place. i asked for clear and convinging evidence and you cite a bunch of people's conclusions. I ask for you to pick the time period where the tariff's in place harmed the USA and the best you can come up with is well they did not help some industries that were not subject to protection. You have I will grant also cited some help to the textile industry of the mid 19th century but the purpose of this discussion was you were supposed to present facts from teh Historical record contradicting premise that tariffs were beneficial to the USA. Specifics are in order since it the ggrowth I mentioned and you mentioned all occurred during periods with protective tariffs. Theory does not suffice nor does your so called logic specific mathematics would spoecific facts with libnks to harm would also be quite sufficient to get my admission that you are correct that tariffs on imports are harmful to the USA.

[harpseal]

I see what you are proposing. Sorry. End of story. The scholarship that is out there involves massive regressions on multivariate tariff rates that would simply be ridiculous to try to reprint here.

Figures why is it every time I ask for hard data from the tariff opponents they will never come up with it. I can do the math in regression anaysis and I can verify if it true or not as can othe mathemeticians.

I thought, for a moment, that you were actually interesting in learning something about the tariff.

I am interested in learning everything I can about tariffs. So far what I have learned is no one who argues that tariffs on imports to the USA are bad for the USA can or will come forward with evidence to justify that position. Oh yes I also learned that before the tariff of 1789 US wages were below those of England and after some years of protective tariffs in place they where higher than England's. I actually do remeber this from other sources but you brought it to mind. The historical record is out there if tariffs or bad for the USA then someone should be able to post the evidence. SO far all we have for evidence is the published conclusions of some individuals based up we know not what verifiable facts. Scholarship involves checking referneces and tracing back to at least seconday sources for factual data.

If you want a regression analysis of US China trade here is one here That IS the historical record. You cannot debate one variable without holding others constant, which requires computer regression analyses to perform. So if you don't want to accept the scholarship that is out there---and won't go check it out for yourself, then this whole things was a giant miscommunication.

So if I do not accept the conclusions you cited from teh scholarship out there I am not debating teh historical record. Please note you have been provided wit a regression analysis on US China trade relatiosn. I do not expectyou to simply accept it because I provided it to rather read it digest it and perhaps you will agree with its conclusions. yes it dry and not a "fun read" to many but it supports the idea that the currenttade policy with China is a disaster for the USA. I note this is the Historical recoird. I asked for proff from you I ahve herwith provided a link to even more proof. Yes 64 pages is a long read. We both know there are fashions in economic thinking and the current fashion is that tariffs are bad. This is based on computer regression analysis that does have some highly suspect assumptions in my opinion and assumptios are strictly a matter of opinion.

let me go back to Euclidian geometry Postulates can not be proven or disproven they are the assumptions uponwhich Geometry is built. Clearly if parallel lines were difined as two lines that eventually cross when one travels far enogh on those lines we would be dealing with a field of study whose conclusions would be entirely different. Postulates must be self-evident. Further in regression analysis the equations must be correct and the programing of the equations must be direct.

When you state tariffs harm teh anton that imposes them you are contardicting what appears to be observed reality. When questioned the justification must be clear and available or what you are stating should not be accepted. Clearly also an interdisciplinary approach is required.

I really was hoping you could show me the data that would convince me. Links to published articles on teh internet including the regression analysisi that debunks what you have been provided a link to would have been appreciated. I prefer that policy be decided on fact not theory and I clearly would have been interested in some actual evidence taht stood up of a tariff actually harming the nation that imposed it. I suspect one could come up with an example where teh tariff was only a tax increase and not off set by tax decreases. i am actually saddened taht you can not or will not come up with such information. I am just a poor working stiff not an academic. yes I do have degrees that include finace mathematics and history but I do not teach at a university. I thought certainly an academic could provide such information.

[harpseal]

Sadly LS chooses not to paricipate in a debate that involves more tahn his citing conclusions from people who support his position. I do admit there may be evidence out tehre that can show where a tariff imposed on imports into teh uSA was harmful to the USA but I have yet to see anyone post it. Are my standards strict? yes I want to se historical facts listed that clearly show or mathematically show tariffs harmful to the USA. I have given a link to a regression analysis supporting my view.

I will be happy to discuss same and would be happy to read any valid mathematical criticism, or anyt mistatement of facts or questions of the assumptions.

[hedgetrimmer]

A peach growers call for support
By Randy Fiorini, third-generation peach grower and former Chairman of the California Cling Peach Board

Today we find an industry, a piece of our American heritage, in decline. Due to varying market conditions, Cling Peach acreage has been reduced; and our family of growers, once in the thousands, has been reduced to about 700.

Much of the decline can be attributed to the loss of international markets to lower-priced, subsidized canned peaches from the European Union countries of Spain and Greece. Having captured most of the key markets around the world, EU-subsidized Greek and Spanish canned peaches are now finding their way into the US market at very low prices. Last year marked an all-time high for imports, reducing sales opportunities in the only major market remaining for the California Cling Peach industry.

The influx of foreign product threatens American jobs, compromises our nation’s ability to produce its own food supply (thereby increasing our dependence on other countries) and potentially jeopardizes our national health (foreign producers are not regulated by the high standards that American producers achieve). It is my hope that our call for help inspires support for our industry and encourages you to join our “Buy American” campaign.

At the end of each year’s Cling Peach harvest in California, where nearly 100 percent of US production is grown, our industry looks forward to fulfilling all of your needs for high quality and U.S. inspected and regulated canned and frozen Cling Peaches.

Enjoy the “fruits” of our labor all year long and please read your labels closely. Buy American peaches and encourage your grocers to do the same. Thanks in advance for your support.

********************

So much for "free market economic competition". We have lowered our trade barrier to the EU, and what do they do to us? The undercut our farmers with subsidized products. Is that "free market"? Is that true economic competition". Shouldn't we be protecting our market from pernicious marketing from subsidized foreign companies? Because this is not "free trade" and it is killing another segment of our economy, we are just supposed let them steamroll our agriculture into oblivion?

[hedgetrimmer]

More on peaches...

The surplus is caused in part by imports from countries that subsidize their peaches, particularly Greece. Cheaper Greek peaches can be found even in local grocery stores, Johnson said.

"Greek exporters offering rock-bottom prices have inundated most international markets, and Greece's exceptional competitive advantage is severely impacting U.S. canned peach exports" even to Canada, once the United States' best customer, according to the California Cling Peach Board.

Sampson said he was unaware of peach "dumping" by other countries until he met with area growers during a visit to the area a few months ago, Johnson said.

Sarb Johl, an area grower and vice chairman of the State Cling Peach Growers Advisory Board, predicted next year's surplus will be between 75,000 and 100,000 tons. It's possible some of the excess could end up rotting on the ground, depending on the amount of foreign competition. But it could also end up being sold on secondary markets for juice instead of canning, Johl said.

California growers used to export as many as 6 million cases of cling peaches annually. Imports have reduced that figure to less than 1 million cases, Johl said.

http://www.ysedc.org/news_articles/2002/peach_growers_seek_new_buyers.htm

[LS]

And for the rest of you who understand how REAL scholarship is done---how you assess data, how you gather historical data---I'd be happy to discuss any of the recent scholarship with you.

Harp seems incapable of reading a scholarly article, because it might come to a conclusion he doesn't want to accept.

[LS]

" I am just a poor working stiff not an academic"

1) That is exactly why I tried to education you on exactly what the scholarly studies say.

2) Simply listing a series of wool prices from the 1830s establishes nothing except what wool prices were. That's why people do STUDIES, which you are unwilling to confront.

Hope all you people are getting this: I've offered the SPECFIC studies, the data, and he still doesn't want to examine it. Now we're at Euclid.

[LS]

1) Since there was no period in the 19th century when there was not a tariff on some good in place somewhere, you create a false argument.

2) What we can show is that a) non-protected industries did just fine; b) when tariffs were abruptly removed, the industries adjusted quickly.

3) But the fact that you are astute enough to see that I (unlike you) actually CITE scholarship that might be harmful to my case shows that your baloney about being a "poor working stiff" who can't understand the studies is a smokescreen for you not WANTING to read the studies.

[harpseal]

1) Since there was no period in the 19th century when there was not a tariff on some good in place somewhere, you create a false argument.

There is nothing false about the argument. you have stated that tariffs are harmful to the nation that has imposed them.

2) What we can show is that a) non-protected industries did just fine; b) when tariffs were abruptly removed, the industries adjusted quickly. And this prtoves that when the tariffs were removed the industries still did hust fine. It states nothing about good or ill done by the tariff itself.

3) But the fact that you are astute enough to see that I (unlike you) actually CITE scholarship that might be harmful to my case shows that your baloney about being a "poor working stiff" who can't understand the studies is a smokescreen for you not WANTING to read the studies.

I never ever claimed to not understand the studies what I claimed is I did not accept conclusions without evidence presented in support. The Challenge was you would show a case where tariffs were harmful. Your citations of cases where upon removal of a tartiff the industry did just fine seems very similar to the heavy motorcycle industry from teh twentieth Century. you talked of the need for regression analysis top prove the point you said you would prove. I provided a link to a regression analysis.

As to your scfholarly quotations my the standards for scholarly work must certainly have come down. When I was involvbed in writing disertations certainly I did not merely put down a quote from another artice without giving the full refernce in a footnote ioncluding date of publication and opage of the journal in which it was published. If you allow your students to get away with such sloppy scholarship then I must question why you are allowed to stay on teh faculty biut if you think your statement that you teach economic history impresses me You really will need to come up with some clear proof that tariffs are HARMFUL. You brought up regression analysis. You are asserting that tariffs are harmful is provable fact. In support you have cited some who claim to have conckluded that and we are supposed top rely on the fact that they were published in an academic journal. Noam Chomsky and Howard Zinn are also published in academic journals and some rely on their conclusions as proof but that is not proof. Proof is contained in sound regression analysis.

Now lets discuss the real issue you believe that tariffs are harmful so you assert that as fact. Belief is not proof either.

[harpseal]

" I am just a poor working stiff not an academic" 1) That is exactly why I tried to education you on exactly what the scholarly studies say.

I did not say that I had not had rigorous academicv training and to educate me I believe you would have to demonstartre knpowdge of the subject which you have yet to do. Now The originalk challende was for you to prove that a tariff was harmfull to the nation imposing the tariff. instead of any evidence to that effect you offer evidence that it may not be helpful. If in some cases it is neutral so be it. It is still a prefered means of revenue for government to an income tax.

2) Simply listing a series of wool prices from the 1830s establishes nothing except what wool prices were. That's why people do STUDIES, which you are unwilling to confront.

Not so. listing wool prices from teh 1830's along with a link to the full study or excerpts ogf the process by which conclusions are drawn allows the critican reader to examine the methodology the author went through as well as to validate the data the author used with other sources. As an academic you might have heard of the process called peer review which is a continuing process in the world of most scholarly disciplines.

Hope all you people are getting this: I've offered the SPECFIC studies, the data, and he still doesn't want to examine it. Now we're at Euclid.

Please point to a post with specific data that supports tariffs are harmful. Not a post that merely lists an authors conclusions. Conclusions are not data. A study may be valid or invalid but but maybe I missed the detailed dates and page references from your quotations. so that I can see them in context of the original studies. Oh and clearly it is too early to expect a critique of teh regression analysis I provided a link to but I presume you have at least verified taht it is there all 64 pages. As you said regression analysisi are needed for proof I have provided one. Your turn or would you continue to just falsely attack and claim we should worship at your all knowing feet because yopu claim to be a college teavher of economic history. I do find it interesting that you cited 1848 for the steel tariff before Henry Bessemer came up with his process for maleable iron which predated the steel converter. I really do prefer a civil discussion and would have liked to see the actual evidence you say you have access to. i note anyone can go to teh Cato institute and see their prepacjaged anti tariff arguments and cite from the scholarly research there. But universal acceptance in academic ranks does not make a thing true and I doubt there is very much universally accepted in economic circles. That is the reason the full study must be made available. including the originals footnotes.

You will note in the regression analysis I provided that it has such footnotes.

[harpseal]

Please point out to everyone the links you posted to these papers or the full academic footnates posted. come on every college Freshman learns to do footnsotes or used to anyway you can do it then I can at least have a chance to find thepaper without having to do a whole lot of persusal of abstracts. it is a process that used to allow academic reveiw. or are you once again stating you have this from on high accept it peaeent. No thank I prefer the old fashioned method of rigourous review of course to rigorously review somethin it needs to be submitted in a standard style which you chose not to do. of course links on tehinternet should also be acceptable becaus ethe full article is then avaiable in a searchable format.

You and all pleasde note the regression analysisi provided via link. A regression analysisi that you have refused to comment aupon. I guess you are such a respeced academicv you need not stoop to commenting on scholarship referenced in a way the reader can look at the original work.

Do you subscribe to the Michael Belisies (sp?) school of scholarship?

[harpseal]

By the way I would also love to see links to the regression analysis that showed the textile traiff was helpful. You cited specifically conclusions by someone who disageed with your positions had you provided links to the data he used to come to his conclusions and the logiuc that he used and any Mathematics used to come to those conclusions it would have been evidence. Conclusions alone are not evidence without teh supporting data and a locial path (I prefer a mathematical patyh but will accept explicit logic from teh data to the conclusion. Thgis used to be teh standard of scholarship.

I said I was not anb academic I did not say I was uneducated. I furtehr did not state I was unedecated in economics or could not understnd the studies. I do not claim to be all wise and all knowing I merely asked for evidence of a stratement that ran counter to teh common understanding of many who have looked at the tariff question. It may well eb a fact that a preponderance of academics in teh field of economics current accept this theory but that is not empirical evidence teh theory is correct. Gor a long tiime circular orbits were accepted as the proper explabtaion of planetary motion. Then Johannes Kepler came up with a better theory based on ov=bservational evidence.

You question my seeking data BVy providing the data that was used in the original paper/bbook.diertation/thesis one may well be able to draw different data by including other data omitted from teh original work or by providing a better explanation. It is the methodology of scholarship again.

Shall we star over civilily. If you state ytou are unwilling or unable to provid esuch data then I shall seek another Free Trade advocate who will provid esuch data the full refernces and the full ogic that actually proves the point that tariffs opposed by the USA are harmful to the USA.

Until then I shall disagree with that ponit and mention the fact that at least one regression analysis seems to disprove that point. I could say disproves but that might be too much of a generalization from even a numbver of papers. There may well bve some evidence overlooked that is inconsistent with teh thesis that a protective tariff helps teh Ameriucna economy or at minimum does no harm.

I am open to evidence in support of your position would you pleae let me know your criticism of the data logic or methodology of the regression analysisi provided and what effect it has on your generalized staement about tariffs. So far it is the only evidence on teh table that is examinable at least that either one of us have presented. There were some links to other papers by a third party to this discussion I will try to get to tommorrow but I do have other things to do.

If you wish time to examine the paper provided I shal be ahppy to wait but do not expect unsibstaniated conclusions tobe accepted merely because a they are someone's conclusions. Further either post a link or post a sytandard academic footnote so one may check out the referneces.

If you wish me to conceed there are cases where the removal of tariffs have been followed by an expansion of the protected industry I will demand to see some sound logic and or mathematics showing how that case leads to a generalization that tariffs harm the nation imposing the tariffs. in fact I wil need to se some logical connections for teh srgument that since in the singular case of an industry doing well after tariff removal that means the tariff was harming the supposedly protected industry.

There this should be a whole lot easier for you. If you can post the conclusion paragraph from teh article thenyou can post the logic contained within the article to reach the conclusion. If you are going from a specific to a general you at least should postr that logic. A classic of an unsupported conclusion is as follows Mary is wearing a blue dress mary is a girl all girls are wearing blue dresses. Simply putting a pHD behind such faulty logic des not make teh conclusion valid. Admittedly this is an oversimplified example but when one is dealing with tose who are so superior to the rest of us poor mortals then one is limited to simple examples.

Come on educate me and everyone else all I want is what you said was necessary to provide the kind of proof I want, good regression analysis that proves your points.

[harpseal]

2) What we can show is that a) non-protected industries did just fine; b) when tariffs were abruptly removed, the industries adjusted quickly.

On a Sunday Morning this intrigues me. How does one go from what can be shown to the generalization that protective tariffs are harmful to the nation imposing those tariffs? I would submit the most that can be inferred from this demonstration is that the tariffs were not needed at the time they werfe removed. Now, I will also admit that tariffs may be impoosed to protect industries that do not need protection.

So what? I do not support imposing unecessary tariffs but that is a very long way from claiming that those tariffs were harmful.

I really think the logic involved in going from what you state you can demonstrate to your conclusions should be provided.

[DugwayDuke]

Two points.

First, it's my experience that one should select a college major by finding the least popular major that you have talent and the desire. This recommendation is based upon both my brother and on myself. Both of us selected the most popular major when we entered college. You know the one, the one where everyone graduating gets a fantastic job? Well, by the time you graduate, there's a glut. And, that other major, the one the advisors recommended against, where no graduate can get a job? Huge shortage by the time you graduate. IOW, since there's a glut of IT professionals now, get a computer sciences degree. In four or five years you'll be in great shape.

I think reducing the size (and cost) of the federal government is probably the best solution since it reduces both the regulatory and tax burden on businessess. A concern I have with any general tariff would be ensuring it replaces existing taxes. You know politicians, always eager for a new revenue source. Democrats should be particularly attracted to a combined income tax and general tariff since it would allow them to pursue their tax the rich strategies while mitigating the effects of corporate taxation and regulation.

[DugwayDuke]

Of course we shouldn't let a country "steamroller" our farmers. That said, are you not the least concerened that a press release from an industry organization complaining about low cost imports might be a bit "slanted"? Also, the trade agreements with the EU allow us to impose tariffs where direct subsidies are involved. I'm all in favor of using tariffs in that case.

"Dumping" and "subsidies" are both legitimate reasons to impose tariffs. Imposing tariffs to raise prices to protect jobs is not. BTW, one wonders how many of these jobs picking peaches are performed by illegal aliens. Would you want to raise prices on citizens to protect the jobs of illegal aliens?

[DugwayDuke]

I would suggest you need to clean up your language. It's totally inappropriate to this forum. And, yes, I'm the one who notified admin about your inappropriate language and name calling.

[DugwayDuke]

"I've been in the MC business since 1988."

I'm not in the motorcycle business but I'm old enough to remember the first Japanese bikes in the mid sixties. I was too young to drive a real motorcycle but old enough for "under five horsepower" machine. Before the Hondas, my choices were a moped or a Cushman Eagle motor scooter.

Given these choices, would you have favored tariffs to save the Cushman Eagle "Icon" or would you have bought a Honda? How would you have felt as an under-resourced teenager about a government imposed tariff that forced you to either pay more for Jap bike or ride a moped?

Yes, tariffs do force people to do certain things. Otherwise there is no purpose in imposing a tariff. When tariffs are imposed there are three choices imposed by government, buy an inferior product, pay increased prices, or forgo buying the product.

"Yes. Look at the recent "no-bid" contract Haliburten and Dynacorp were awarded. Wake up. This is common business practice 24/7."

I'm assuming you're referring to the contracts in the Middle East. These contracts serve legitimate national interests and benefit the nation as a whole. There costs are spread across all tax payers. Tariffs to protect jobs only serve the interests of a segment of the population and their costs are borne by only a segment of the population. You might as well complain about government in general.

Technically you're probably right about HD not being overpriced since there is a dealer markup above MSRP. But the fact remains, you can get a far better deal on other bikes which for all practical purposes means that HD is overpriced. BTW, where does the dealer pricing power come from if not because of nostalgia? Since you tend to prefer Italian Twins (sounds kinda kinky, doesn't it?), I guess you would agree that HD price is not justified on quality or performance.

[searchandrecovery]

Much of the decline can be attributed to the loss of international markets to lower-priced, subsidized canned peaches from the European Union countries of Spain and Greece.

I say "THANKS EU! Your money (via subsidies) is lowering the price for ME!".

Farming is not like big steel - a farmer can plant different crops next year (I think), a steel mill is much tougher to re-configure. So my opinion is - few protections for crops, more (time-delimited) protections for manufacturing. But with free-trade (whatever that means) as a long-term goal.

These opinions are mine, and do not necessarily represent anything other than that.