patrick.net

We have truly sold our birthright for a bowl of soup. Or rather, crooked politicians like Slick Willy have sold it for us. Tell me why in the hell we should elect Willy's wife to "hit me baby one more time?"

Heraclitusstudent says

China is a particularly lucrative market for chicken feet

Mmmmm, chicken feet.

Huh. It save 1000 jobs, but cost $2.2 billion.
Correct me if I'm wrong, but isn't that $2.2 million lost per low/middle wage job saved?

Trump sees this as a role model for how do treat everything?

The democrats would generally prefer to take some of that $2.2 billion and distribute it to lower wage workers.

What's disappointing to me is that the Donald's gambit on trade hasn't sparked a debate to get to the bottom of things. He said it, it was popular, now the other candidates are carving out similar positions. Someone should have had the balls to confront it more directly, so that the conversation could become more productive. I think that people have decided the issue is to complicated to convince voters with an honest debate.

YesYNot says

I think that people have decided the issue is to complicated to convince voters with an honest debate.

I believe it is too complicated for simplistic solutions. And what you call honest debate might lead to dishonest and overly simplistic solutions.

Look at what our simplistic solution to Irag brought us.

I'm not sure that we should be making shirts or assembling iphones here now, if they can be made so much cheaper in China. Economists aren't confused about this. What many are confused about is government spending. We could be spending a lot investing in infrastructure, the commons, and subsidizing private investment in housing, and many things that would support American workers.

Somehow that's not good capitalistic thinking, but paying more for products to get them made here is ?

"We could be spending a lot on infrastructure, housing, and many things that would support American workers with enough government subsidy of such projects."

And that is why Hillary will likely win...

marcus says

I'm not sure that we should be making shirts or assembling iphones here now, if they can be made so much cheaper in China. Economists aren't confused about this. What many are confused about is government spending. We could be spending a lot investing in infrastructure, the commons, and subsidizing private investment in housing, and many things that would support American workers.

Somehow that's not good capitalistic thinking, but paying more for products to get them made here is ?

Two problems as I see it. One is that we (Americans) as a people don't want redistribution. If you allow free trade, it will increase inequality as owners are enriched at the expense of workers. If you don't have a mechanism for getting the money back to the workers, the economy stops functioning. Right now we are using debt to get the money back to the workers, but eventually that will be impossible.

Two is that people instinctively WANT to work. They want to feel needed and that they are contributing to society. Having a high level of structural unemployment is bad for society.

I think it's much better to heave higher prices, higher wages, and low unemployment.

Yet Another Open Letter to Paul Krugman
Posted: 10 Mar 2016 08:22 AM PST
(Don Boudreaux)
Tweet

Mr. Krugman:

In your recent blogging effort to excuse those who oppose free trade, you write that “the case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins.” You then conclude that, because Uncle Sam is today unwilling to redistribute income as freely as you like, the “case for ever-freer trade is largely a scam.”

But as I’m surprised you don’t know, the conventional case for free trade in fact does not rely “on the assertion that the government could redistribute income to ensure that everyone wins.” Instead, the conventional case for trade liberalization relies on the reality that, even in the short run, the gains from trade liberalization exceed the losses and, over the long run, trade liberalization improves the material well-being of nearly everyone – all without any government-directed redistribution of income.

Put differently, the conventional case for trade liberalization is identical to the conventional case for economic competition and innovation. Surely you don’t teach your students that economists’ case for competition and innovation “relies on the assertion that government could redistribute income to ensure that everyone wins” – and thereby imply to your students that when government does not actively redistribute income, an economy kept static by monopoly power and by the suppression of technology is superior to one made dynamic by competition and innovation.

Or do you, sir? Your blog post today suggests that you might well indeed teach your students that the case for competition and innovation holds only when government actively redistributes income – and, therefore, that if government doesn’t redistribute income, ordinary people’s economic well-being is best ensured by monopoly power and technological stagnation.

Do you teach your students such nonsense? If not, why do you now peddle it to your readers?

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University

http://cafehayek.com/

Mr. Boudreaux is wrong. The gains from free trade are experienced only by a small percentage of the population and that IS a huge problem. For him to gloss over this fact as if it's meaningless is unbelievable.

Yes Tat knows more about this than:

Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University

What is unbelievable is your hubris.

indigenous says

Yes Tat knows more about this than:

Donald J. Boudreaux

Professor of Economics

and

Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center

George Mason University

What is unbelievable is your hubris.

Logical fallacy--Appeal to authority.

tatupu70 says

Logical fallacy--Appeal to authority.

It would be a Logical fallacy to listen to a mutt instead of a college professor...

Why don't you ask the esteemed Mr. Boudreaux how free trade has helped the folks in OH or MI, or IL, or IN? Or MA? I'd be very interested to hear how working for $12/hour is much better than working for $25/hour in his opinion. Or not working for $12/hour because you can't even get a job paying that much anymore.

I will direct you to the answer. But you can email the professor if you like.

Watch this video:

http://www.ted.com/talks/matt_ridley_when_ideas_have_sex?language=en

Hint you do not consider the raised buying power of the consumers.

indigenous says

I will direct you to the answer. But you can email if you like.

I'm not watching a 16 minute video that almost certainly won't answer it.

I know his answer--the world economy is more efficient. Well, guess what--who the fuck cares. Policies in the US should be made to benefit US citizens. And losing US jobs and treasure to other countries is NOT helping US citizens.

tatupu70 says

If you allow free trade, it will increase inequality as owners are enriched at the expense of workers.

This makes the incorrect assumption that lower labor costs necessarily pad profits, rather than simply lowering prices to the consumer. AS long as there is enough competition, the reduction is passed on to the consumer. In clothing for example, which is I assume a significant contributor to our trade deficit with asia, competion is significant.

indigenous says

Hint you do not consider the raised buying power of the consumers.

Of course I do. The raised buying power is great for those that still have jobs. That's why it increases inequality. But people who are unemployed or making half of what they used to aren't excited that they can buy a carrier air conditioner for $10 less.

marcus says

This makes the incorrect assumption that lower labor costs necessarily pad profits, rather than simply lowering prices to the consumer. AS long as there is enough competition, the reduction is passed on to the consumer. In clothing for example, which is I assume a significant contributor to our trade deficit with asia, competion is significant.

Well, take a look at this chart and tell me if you think corporate profits have increased since free trade took off.

tatupu70 says

Right now we are using debt to get the money back to the workers, but eventually that will be impossible.

Automation is going to cause us to not have enough work to go around anyway. We need to change our models in preparation for that anyway.

tatupu70 says

Of course I do. The raised buying power is great for those that still have jobs. That's why it increases inequality. But people who are unemployed or making half of what they used to aren't excited that they can buy a carrier air conditioner for $10 less.

In that case fuck off mutt

Here is another one http://fee.org/articles/what-killed-economic-growth/

tatupu70 says

Well, take a look at this chart and tell me if you think corporate profits have increased since free trade took off.

Yes, but your inference is possibly substantially off. You assume that it's because profit margins increased under free trade. IT's probably true, a little. But it might be the third most important contributor to the increase in profit.

marcus says

Yes, but your inference is possibly substantially off. You assume that it's because profit margins increased under free trade. IT's probably true, a little. But it might be the third most important contributor to the increase in profit.

OK, I'm listening. What are the 1st and 2nd most important factors then?

YesYNot says

Huh. It save 1000 jobs, but cost $2.2 billion.

Correct me if I'm wrong, but isn't that $2.2 million lost per low/middle wage job saved?

No! When it costs extra to produce in the US, this is not lost money . This is money that goes to workers, who then spend it on other things. The same dollars get spent several times within the US. They get taxed. Then spent again on education, infrastructures, etc...
Instead if you buy in China, you'll never see these dollars again. These will not be available to be spent on anything else.

On one side you have jobs, skills, production in the US and slightly lower buying power.
On the other side you have unemployed people, cheap stuff, skills directly lost here and offered to other countries, commodity jobs with no skills, and giant debts just to keep a pale version of our historic standards of living.

This is a simple equation. Saying you "save" by buying abroad is delusional. What you are doing is burning the furniture to keep warm.

marcus says

Yes, but your inference is possibly substantially off. You assume that it's because profit margins increased under free trade. IT's probably true, a little. But it might be the third most important contributor to the increase in profit.

You guys defending this situation are not serious and not paying attention.
Look at where the US is vs China compared to 35 yrs earlier.
Look at the type of jobs the lower half of the US population have - if they are lucky to have one.
Look at the social situations deriving from these jobs.
Look at what rich CEOs of multinational corporations are getting.

This is not the result of some exogenous trend that no one controls.
This was deliberately designed this way simply by putting a majority of US workers in direct competition with hundreds of millions of new dirt poor workers, working in slave like conditions .

It is simply not the case that US workers COULD come up on top from this.

marcus says

Automation is going to cause us to not have enough work to go around anyway.

We may come to a point where most jobs are automated but we are VERY far from that now.
It's absurd to blame automation when there are 10 jobs producing iphones in China for every Apple employee in the US.

Technology has improved for centuries and historically the productivity gains were always passed to workers as long as these workers were in limited supply and needed, so that companies were competing for these workers. This would be true even for UBER jobs: if drivers willing to work for Uber were rarer, they would consequently be able to extract better benefits from their employers. But once you bring an overwhelming supply of new workers by opening trade to third world, you create a race to the bottom where people are forced to debase themselves and do whatever is needed just to survive. As a result the government revenues collapse, forcing to cut on services and increase debt. Eventually education and the institutions of the country themselves are dragged down.

* Property Taxes Lost
* Primary Jobs Lost
* State and Federal taxes lost
* Payroll contributions to SS/MCaid/MCare lost
* Wages decline because of less competition between employees (ie Walmart and Joe's Pizza had to fight Acme Mills for unskilled employees; now competition is less)
* Lower wages mean less State, Federal, Payroll taxes on remaining jobs.
* All of this means declining services and generally BOTH debt increases AND increased taxes on surviving homeowners, businesses, and taxpayers
* And often "Ticket Revenue" Schemes initiated - cops pull over the locals like crazy to generate revenue for trifling offenses (ie functional but chipped taillight)
* Losses "Trickle Up" - more people go to college to get educated, more competition for educated jobs, thus lower wages.

* Add H1-B and mass immigration to the mix and it's a big pile of shit.

“ I do not know much about the tariff, but I know this much, when
we buy manufactured goods abroad, we get the goods and the
foreigner gets the money. When we buy the manufactured goods at
home, we get both the goods and the money.” - Abraham Lincoln (alleged).

http://www.citizen.org/Page.aspx?pid=3424

Ohio Job Loss During the NAFTA-WTO Period

Ohio lost 307,560 manufacturing jobs (or 31.1 percent) during the NAFTA-WTO period (1994-2015), according to the Bureau of Labor Statistics.* This figure is for total manufacturing employment, so it takes into account both jobs created by exports and jobs displaced by imports, among other causes of net job change. The percentage of all private sector jobs that are manufacturing jobs in Ohio declined from 23.4 percent to 15 percent during the NAFTA-WTO period.

These are aggregate numbers, but the Department of Labor tracks instances of specific workers at specific workplaces who applied for special benefits for trade-displaced workers. In Ohio, there are 142,850 such workers certified as having lost their job due to imports or offshoring under the Trade Adjustment Assistance program. (Note: This program is difficult to qualify for, and this figure only includes those workers who were certified.)

The Economic Policy Institute found that by 2010, 34,900 jobs had been lost or displaced in Ohio – and about 700,000 in the United States – due to the rise in the trade deficit with Mexico alone since NAFTA was enacted in 1994.

The Economic Policy Institute also found that by 2013, 106,400 jobs had been lost or displaced in Ohio – and more than 3.2 million in the United States – due to the rise in the trade deficit with China since it joined the World Trade Organization in 2001.

tatupu70 says

OK, I'm listening. What are the 1st and 2nd most important factors then?

I'm not claiming to know, I'm just saying that you have absolutely zero reason to think that's a bout bigger margins due to outsourcing labor.

Some other possibilities:

Increased volumes due to lower labor costs and hence lower prices

Selling in other markets, much of which doesn't go in to our trade imbalance numbers because of foreign subsidiaries of U.S. corporations

Buy backs of stock and assorted other gimmickry related to financialization

Profits of the financial sector which must be up to about 20% of our economy

"Rents" of various kinds, including assets bought at discount in 2008 - 2011

Cutting back on number of employees after the crash(es), and then not rehiring when things improved. Using automation and asking 2 people to do what were three jobs before.

The list goes on. As I said, the idea that it's from huge margins on cheap labor, implies that there aren't competitors also using the the same pool of cheap labor. What sectors of products made by outsourced labor are you assuming are the most lacking in competition, allowing these high margins ? Sometimes lower prices more than make up for lower margins anyway (with volume). For example smart phones, or clothing.

marcus says

I'm not claiming to know, I'm just saying that you have absolutely zero reason to think that's a bout bigger margins due to outsourcing labor.

Well, that's definitely not true. I have pretty good reason to think it's due to outsourcing labor. Outsourced labor is significantly cheaper. The rise in corporate profits correlates pretty closely with the timeframe of outsourcing. Those are two pretty strong reasons.

YesYNot says

Huh. It save 1000 jobs, but cost $2.2 billion.

Correct me if I'm wrong, but isn't that $2.2 million lost per low/middle wage job saved?

Incorrect! It cost the general public 1.1 billion in costs to pay tariffs or buy American made tires instead. This money was put into the government and redistributed. It cost chicken parts exporters 1.1 billion. That's money lost to a class of wealthy fuck who can most certainly afford it, and it wasn't truly lost, just the opportunity for trade was lost.
In aggregate the American workers won from that deal TWICE, maybe three times. More tax money to provide jobs and funding for programs, more Americans kept their jobs, more money from those jobs stayed in America to fuel our economy, and more tax money from those jobs went back to the government to begin the cycle again. It was a hug net benefit to America, paid for by a forfeiture of some of the profits to one sector of the owner class.
Obama got this one exactly right. Just like he got it right to shut down the GOP program that let Mexican truck drivers take goods into the US to replace American truck drivers.

If our government can not or will not protect us, then what good is it?
If the people who own land and other necessities hoard them or use them unwisely, they should be relieved of their burdens. Nobody has an absolute right to anything on this planet. Once you understand that, you will understand the rightful responsibility of wealth. It's not a title of nobility that grants some sort of God-given RIght of Kings to owners. It's the public trust that they will manage the resources responsibly for the good of all.

tatupu70 says

Outsourced labor is significantly cheaper. The rise in corporate profits correlates pretty closely with the timeframe of outsourcing. Those are two pretty strong reasons.

You aren't hearing me, and your logic is nonexistent.

The other thing is a very significant amount of outsourced labor is unrelated to manufacturing. I'm talking about good jobs lost to outsourcing, that tarrifs are not going to bring back.

http://www.statisticbrain.com/outsourcing-statistics-by-country/