Posted on 05/20/2016 7:18:57 AM PDT by drop 50 and fire for effect
When it comes to the impact of global trade, the dismal science has done a dismal job explaining how to help workers hurt by globalization.
As a recovering economist writing on behalf of my erstwhile field, I would like to apologize to every American who has lost a job or a livelihood because of globalization. Economics has failed you. It has failed you because of ideology, politics, and laziness. It has failed you because its teachings are woefully incomplete, and its greatest exponents have done almost nothing to complete them.
There are “positive” questions in economics that have mathematical answers — things that simply must be true — and then there are “normative” questions that amount to value judgments on points of policy. In economics classes, we teach the former and usually stop short when faced with the latter. This leaves a hole in any discussion of economic policy; students acquire first principles but rarely consider real-world applications, because to do so would presuppose a social or political point of view.
(Excerpt) Read more at foreignpolicy.com ...
That is a stupid statement! It is like saying Gravity has failed you. When a plane crashes because of poor design, it is not Gravity that failed, it is the failure to adequately account for Gravity.
Economics is a set of laws, immutable forces, not a set of suggestions. When Economists, politicians or businessmen deny or attempt to distort the laws of economics, their actions fail to achieve their intended purpose. The outcome does not represent a failure of economics, the outcome will be exactly what the laws of economics predict.
We are currently in a disaster. A majority of manufacturing is done overseas. While the unemployment rate is low, it is widely accepted that this low rate is secondary to more people being out of the work force. The federal government has recorded the highest level of debt ever and has unfunded liabilities at the highest level ever. You could say it's fertile ground for things to get worse.
So I wonder is it the tariffs and S-H2.0 that's going to worsen it or is it the fact that no one knows a smooth way out of this mess? I rather think corruption is to blame, the ruling elite have been driving us toward disaster and the voters have finally decided to rip their hands off the steering wheel. We may head further down the disaster path before we finally turn the car around. But now we still have to drive out of disaster land before we are back on a road to prosperity. All the pain of getting back out will be blamed on the final desperate act of the voters.
We have had 3 decades of Free Trade. It may take 3 decades more to get back on our feet.
Here’s an economist in full panic mode at the prospect of a Trump Presidency. Interesting he blames professional economists for failing to do their job. Of course, people are angry at more than just the fallout from globalism. They are angry at the government for failures across the board, not just in trade. Blame the left and the Democratic Party for virtually of these, including quisling Republicans who supported them.
With a production volume of about 21 million passenger cars, China ranked first among countries with the largest production of passenger cars in 2015. It was followed by Japan, Germany, the United States
https://en.wikipedia.org/wiki/List_of_countries_by_steel_production
with “geniuses” like you and NAFTA bill clinton on our side the U.S. will soon be in the stone age with no factories on our shores
.]
You actually believe a city sized steel mill along with machine tool factories, car parts factories, Chip manufacturers etc. coming back to a U.S. city won't provide jobs and wealth creation to that city then you are completely brain dead.
IOW, you’ve never seen a Chinese car in the US.
Detroit’s problems don’t stem from China.
You posted your comment on the web, with no sense of irony whatsoever.
The demise of both Beta-Max and VHS were market driven, due to changing technology. Both would have become obsolete with the wave moving to CD, then DVD, then Blu-Ray, and now streaming broadband. That competition was driven by supply and demand, but is not representative of other products or industries.
You can find particular sets of products to support whatever economic theory you are pushing at any particular moment, without that set of products painting a clear picture of the overall economy. What does reflect the overall economic change of the past few decades is the massive movement supporting Trump. These crowds we have seen are mostly working, productive people, of all sectors of the economy, all education levels, all colors, voicing their discontent with the drastic reduction in lifestyle they have experienced. These are NOT the deadbeat gimmee-dats, or the deadbeat government employees, or the ignorant youth, or the terminally outraged, spoiled liberal campus brats.
The "creative destruction" wrought by the Free Traitors did not result in superior products or better prices. For instance, we are now paying more for textile products and the quality is poorer than those of thirty years ago. The demand for textiles is more in line with household staples than with discretionary spending.
The prices of vehicles are higher now by far more than inflation can account for, and the labor that goes into vehicles is less than ever before. Those prices are driven by environmental snake-oil and the resulting US regulations. None of this is quality driven, or supply/demand driven.
As I said before, people are aware that the changes in their economic situation has been politically driven, not economically driven, for the vast array of changes. Snake-oil is not selling well in this campaign season.
Smoot-Hawley meme is a vapid attempt at placing blame for the Great Depression on an obscure trade bill. It is rewriting of history at is worst.
The founding fathers rejected every tenant of Adam Smith's BS theory. Thank God.
In 1913 we went back to Smith and Keynes and now look. We are in ruins.
Shhhh. You're upsetting the Free Traitors™ again.
Japan, China they are all self serving zipperheads.
So, in other words, I shouldn’t look at examples but instead look at some amorphous “picture.” I suppose it works for the global-warming scientists, why not here?
Not so. Adam Smith and Keynes are direct opposites in economic theory.
Smith's Wealth of Nations has been the foundation of real free market economic principles for this nation from its founding, and for others that have followed our lead. McKinley, Coolidge, Reagan, and soon Trump, are the only Republican presidents of the past 120 years to favor Adam Smith's economic model of free market capitalism. Smith advocated minimal government intervention in the internal economy (which our founders implemented). Smith identified four essential government functions in a free market economy, which our founders implemented. None of the economic chaos we've seen in our lives is due to Adam Smith's recommendations. It is due to Keynes and Ricardo.
Keynes, the darling of the left, advocated massive government spending (FDR type) and massive taxes (also FDR style) to keep the economy dragging along, and to keep the people in line.
The Republican progressives (Hoover types and modern neo-cons) adopted a Ricardo model, a proven failure in the UK and Europe, and now a proven failure in the USA. Ike didn't have much of an economic policy, with his policies being driven mostly by the needs of post-war reconstruction.
That's how the global-warming fruitcakes operate.
No, I was responding to your opposition to the term “creative destruction” by giving you an example of it—and asking you what term you would use instead.
The below quote is from Schumpeter which provides an answer for the current electoral tsunami approaching the US, for those with the ability to understand (in bold).
In Capitalism, Socialism and Democracy (1942), Joseph Schumpeter developed the concept out of a careful reading of Marx’s thought (to which the whole of Part I of the book is devoted), arguing (in Part II) that the creative-destructive forces unleashed by capitalism would eventually lead to its demise as a system (see below).[7]
Fail. Complete poppy cock. The USA first law was tariff Act signed by President Washington in 1789. The USA was a protectionist nation until 1913 when progressives gave us the income tax. You have it so wrong.
You can download the entire works here.
Or just read some of other peoples' excerpts and discussions, like this one below:
Its important to understand that Adam Smith also saw cases in which tariffs might be beneficial, which he discusses in Part II of Book IV of the Wealth of Nations : 'Of Restraints Upon the Importation from Foreign Countries of Such Goods as Can Be Produced at Home' .He argues that the two cases in which it would be advantageous are when an industry is required for national defense, and when there is some internal tax placed on domestic industry which makes it more difficult to sell domestic products compared to foreign products.
Then he goes on to talk about cases in which there have to be deliberation, including retaliatory tariffs. His difference from mercantilists was he thought retaliatory tariffs always should have the goal in mind of returning the situation to how it was and influencing the other party to drop tariffs.
So there's a question to me of how much Hamilton really strayed from Smith compared to others who went even farther than Smith and become doctrinaire partisans against tariff.
Hamilton, and later List, expanded on Smith's limits, and suggested tariffs may appropriate for things like 'infant industry protection'.
But like Smith, they opposed the old System of mercantilism, which was more than about protective tariffs -- in establishing state sponsored monopolies, privileges, control of trading ports, determining who colonies could trade with, creating strict quality regulations that were punishable by death. Mercantilists also assumed the point of trade was to always encourage exports over imports, which Hamilton didn't accept either.
The opponents of Hamilton and List, who were free trade exponents and disliked all tariffs, were no better as heirs of Smith.
(1) when an industry is required for national defense, and
Think of all the industries necessary to national defense that are wholly and mostly now outsourced overseas -- steel, rare earth metals, textiles, boots, even food stuffs, and more.
(2)when there is some internal tax placed on domestic industry which makes it more difficult to sell domestic products compared to foreign products.
Our whole domestic industry of labor is taxed at more than half its revenue in some form or other.
The common thread of the Wealth of Nations is the “Invisible Hand.” Adam Smith did not present a prescription but a philosophy.
His points were never accepted because man has to CONTROL things, not trust the Invisible Hand.
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