Economists Agree on Wisdom of Free Trade

  • Posted by a hidden member.
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    Apr 29, 2015 1:26 AM GMT
    NYT: The issue at hand is whether Congress will give President Obama “fast track” authority to negotiate a trade deal with our trading partners in the Pacific. Among economists, the issue is a no-brainer.

    Fetishism about gold is now rare, but a new form of mercantilism pervades the modern debate about trade. Politicians and pundits often recoil at imports because they destroy domestic jobs, while they applaud exports because they create jobs.

    Economists respond that full employment is possible with any pattern of trade. The main issue is not the number of jobs, but which jobs. Americans should work in those industries in which we have an advantage compared with other nations, and we should import from abroad those goods that can be produced more cheaply there.

    http://www.nytimes.com/2015/04/26/upshot/economists-actually-agree-on-this-point-the-wisdom-of-free-trade.html?
  • tj85016

    Posts: 4123

    Apr 29, 2015 4:40 AM GMT
    lol, this is utter bullshit, even for the NYT

    just smooth over the effects of fewer US jobs and lower US wages with some nonsense, typical
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    Apr 29, 2015 2:40 PM GMT
    Why Free Trade Makes America Safe

    NYT: What does all this have to do with trade deals? With rising disorder in the Middle East and Africa — and with China and Russia trying to tug the world their way — there has never been a more important time.

    These trade agreements can help build trust, coordination and growth that tilt the balance in all these countries more toward global cooperation than “hunkering down in protectionism or nationalism and letting others, or nobody, write the rules.”

    As Obama told his liberal critics Friday: If we abandon this effort to expand trade on our terms, “China, the 800-pound gorilla in Asia will create its own set of rules,” signing bilateral trade agreements one by one across Asia “that advantage Chinese companies and Chinese workers and ... reduce our access ... in the fastest-growing, most dynamic economic part of the world.” But if we get the Pacific trade deal done, “China is going to have to adapt to this set of trade rules that we’ve established.” If we fail to do that, he added, 20 years from now we’ll “look back and regret it.

    http://www.nytimes.com/2015/04/29/opinion/thomas-l-friedman-on-trade-obama-right-critics-wrong.html
  • Svnw688

    Posts: 3350

    Apr 29, 2015 3:29 PM GMT
    Hogwash. The TPP will surrender our jobs, wages, and environment to the hands of others.

    The entire NYTs article is "economists think international trade is a good thing." Well no f-ing duh. We're not having a debate as to whether trade is good or not in a normative economic sense.

    We're having a debate about the specifics and particulars of any purported agreement. By analogy, we all agree speed limits near schools are, normatively, a good thing. But a speed limit of 70MPH is not a good thing, just like a speed limit of 5MPH, for opposite reasons, is not a good thing.

    This article was dribble.
  • Destinharbor

    Posts: 4433

    Apr 29, 2015 4:27 PM GMT
    tj85016 saidlol, this is utter bullshit, even for the NYT

    just smooth over the effects of fewer US jobs and lower US wages with some nonsense, typical

    I studied economic theory in school and know the major arguments. For ever, I bought the lower trade barrier arguments as efficient leaving higher skilled, higher educated workers free to produce higher value products in the first world. What I see now is happening, is higher skilled, higher educated workers all over the world competing for the same jobs but in lower cost countries. The lower educated, lower skilled workers in this country are falling to equivalence with lower skilled workers elsewhere but again, losing to their peer group in lower cost countries. I think we thought American lower wage earners would remain more educated than our system has produced.

    Not sure if trade barriers would fix that. How exactly would you use trade policy to protect American jobs? Along with buying power? Simply make foreign goods more expensive? Make foreign services more expensive?
  • Svnw688

    Posts: 3350

    Apr 29, 2015 6:49 PM GMT
    ^^Yes, reasonable and well-thought out (the Devil is in the details) tariffs, and regulation of professional services (e.g., you have to be 'barred' to practice law, etc.).

    I'm not anti free trade. But I think we should REQUIRE foreign labor to pay living wages (for that country), enforce their version of OSHA laws, etc. If not, then American workers can NEVER compete, ab initio, because in China they're working for 30 cents a day, sleeping in a factory they're chained in and risking their lives should someone drop an ill-fated match as they smoke in the basement.

    Literally, those cheap goods are sewn oftentimes by child hands, and at risk of personal injury (fire, exhaustion, etc.) to those workers. While some economic models might say we should take advantage of that--let's call it what it is--slave labor, I do not believe that. Even if it means decreased efficiency. There are moral limits. Not to mention that American laws--which are good (OSHA, Title VII, FLSA, etc.) pre se prevent the kind of 'competition' we see abroad.

    The market is not fair. We need to impose tariffs to level the field. And the proceeds of those tariffs should go towards trade programs to "retrain" our low skill or no-longer-needed skilled workers.
  • Destinharbor

    Posts: 4433

    Apr 29, 2015 7:45 PM GMT
    ^^OK, but how would it work? Your China example is probably right for some factories but not all. And some of the countries that allow children (and adults) to work for slave wages have used increased economic activity to begin reforms. China is clearly reforming its pollution-pemissive regulations and workers are starting to demand better wages. Obama says this agreement will not look like NAFTA. Do you require the other country to certify the exports meet standards and then spot check? Would that just push manufacturing to countries not bound by the regs? If the standards aren't fully equivalent to ours would that really slow the flow of manufacturing even if the standards are met? Simply because their wage requirements would be lower? Then all that would do is raise the price of cheap imports without raising the income of Americans.