Do Americans REALLY think their governments have been acting against their interests

Great Debates
1

In this thread the question is asked: “What if the U.S. practiced economic isolationism”

It seems that there are a fair few Americans who really, truly, believe that the US would not, in the long term, be much worse off if it became totally economically isolated.

In effect, that means that they believe that, on balance, the very best that US government and business has managed to achieve (or, more accurately, will in the future manage to achieve), is to break even on international trade.

Do a substantial proportion of Americans really believe that successive US governments, over decades, have been championing international trade despite it being, at best, of no benefit or dis-benefit?

And do they really believe that US businessmen can, at best, only break even when indulging in such trading?

2

I don’t, and I hope not.

3

Well, there was a thread recently showing that some non-zero percentage of American’s believe that the universe revolves around the Earth or something similar. In light of that, I’d say that there is an even larger percentage of American’s (even, presumably educated American 'dopers) who don’t understand trade and who believe the constant trade protectionist memes. This seems to go across political bounds too, since I’ve seen the same horseshit from the left and from the right.

As for folks thinking that the government and/or business acts against the interests of The People…well yeah. Again, this goes across political lines, though the people who think this obviously think it for different ideological (or ignorance based) reasons. A right winger is more apt to think that the government acts against the people whereas a left winger is going to automatically think that business is the culprit…though obviously there is going to be some cross over as well.

What the percentage of folks who think this stuff is I couldn’t say…but it’s probably higher than folks who disbelieve evolution or believe in 9/11 or other CT’s. It seems to be distressingly heavy on this message board, in fact.

-XT

4

Not all Americans’ interests are the same. So it’s clear that every government decision will act against the interests of a portion of Americans. This would hopefully be a minority group since the US is a democratic country, but since people with similar interests often find themselves close to each other, we can find large swathes of society rationally protesting a particular decision that does in fact act against their interests.

As for business, it acts in pursuance of its own interests. Why the interests of business and of the people are the same is in some cases counter-intuitive, and even false in other cases.

5

I personally am appalled by the fact that there are Americans, particularly of the “blue collar” worker class, who do not appreciate the benefits conferred upon us by recent trade pacts.

Many have been able to leave their dirty, unsafe factory jobs for clean work at McDonald’s.

Ungrateful wretches.

6

Of course many of that “fair few” Americans believe that government works only for the benefit of some undefined (but certainly not including them) small elite group. Free trade may benefit that small group, but not them or their group.

It doesn’t really matter whether international trade benefits “business” because the benefits of business accrue to that small group of elites. What they understand, as **Jackmannii **said, is that it’s not benefitting them or their peer group. In other words, it may be good for someone, but it’s bad for the country.

7

Be careful reading that other thread - I am arguing that economic isolation would not be as bad as others are claiming, but they are literally claiming that it would destroy society. Just because I think that it wouldn’t be that bad doesn’t mean that I think that economic isolationism is All That. It just means that I think the degree to which it’s inevitably bad is debatable, and situational.

8

Yes.

It wasn’t people who were saying that it wouldn’t be Armageddon that had me puzzled. Rather it was those who seem to truly believe that the US is suffering a net disadvantage from indulging in global trade and isolating yourselves would lead to an overall improvement.

9

Isn’t that a case of the excluded middle? I remember having a conversation with a Japanese economist many years ago about the fact that Japan was limiting imports of rice while the US was letting in Japanese cars. He said that was different, because raising rice had a quasi-religious association in Japan. That justified limiting imports in his eyes even though it was economically irrational.

I think that the United States’ first obligation is to it’s own citizens. If limiting some imports, or subsidizing some businesses, will benefit American workers than we should do it. That’s what the rest of the world does. Germany and Japan have a large role of the government in business. China manipulates currency values.

Large corporations do not do things for the benefit of their workers, or the country in which they are based, they exist to serve the interests of the stockholders. That is not always in line with the country’s interests.

10

I’m quite sure that all those working for the US government who have negotiated the various trade treaties through the years were working in what the fully believed to be the best interests of US citizens.

The question is, have all those economists, statisticians, diplomats and business experts got it all so terribly wrong or are people who cry out for protective tariffs the ones who can’t see the whole picture?

Germany and Japan have signed the same trade treaties that the US has. If there is evidence that they are skewing trade in ways that are not allowed by the treaties the US can (and does) complain. Admittedly most of the complaints have come from Boeing who are irked at having been overtaken as the worlds largest suppliers of commercial aircraft and who, themselves, face counter claims of hidden government subsidies. Currency values are outside the main trade agreements which is why the US is powerless to do anything about China’s activities there via GATT.

This is an explanation I gave in another thread for why protectionism tends not to be a good idea:

*There are many, many, people who consider that when a country can no longer compete economically with the world at large to produce some good or service, that the obvious and logical answer is to deny the rest of the world the opportunity to sell that good or service locally.

Yet this is very rarely a sensible solution. If implemented you get one, single, advantage: Some people continue to be employed in a non-competitive industry.

Outweighing this you have two main disadvantages:

  1. Your trading partners will retaliate by blocking your exports to them. Whilst the net monetary result of this may be nil, it means that you have simply shifted the non-viability to some other industry.

  2. Your domestic users of the good or service that you have protected will now have to pay a higher price than they would have to in an open market which means that their industry will no longer be internationally competitive.

So to protect one industry, you have screwed at least two more!
And that’s why virtually all governments are desperate to avoid trade wars.

And if you think: “Well, let’s just stop all international trade”, that means that every single industry that was using goods or services that could more economically be sourced abroad will now be forced to use more expensive goods and services sourced locally. And that means that all the goods and services produced locally will get even more expensive which means …

It would be a vicious circle that would see hyper inflation as wages rose to offset more expensive products which would see the products become even more expensive.*

11

I think some of them aren’t seeing the forest for the trees. “Companies outsource their customer support/textile manufacturing to other countries at the expense of more American jobs. Ergo, if we practice isolationism, there will be a lower unemployment rate and the economy will benefit.”

12

The USA is run by a small, extremely greedy elite. These people usually attend Ivy League universities, and do not (usually) serve in the military. They like “serving” in government, and few have ever had the experience of running a business.
This explains people like Senator John Kerry (D-MA), who recently was caught evading $500,000 in MA sales/excise tax (on a sailboat he had built in New Zealand).
They are quite free with “other people’s money”, and view their jobs as a pleasant diversion.
Meanwhile, the USA is losing its manufactuuring base, as well-apid manufacturing jobs get “outsourced” to places like Mexico and China. The elite doesn’t care…this is actually good for them (it cuts the cost of hired help).
Did I mention charity? Sen. Kerry has a net worth of $166 million (his wife is worth over $1 billion). Despite this, Kerry managed to donate only $500 to charity, last year.

13

And the incredible wealth that unemployment checks confer on them.

14

US manufacturing has experienced steady growth throughout the entire period you’re talking about, outside a couple brief dips during recessions. Moreover, the US manufacturing sector is still the largest in the world, though China is expected to overtake the US next year.

What has dropped is the percentage of employment made up by manufacturing. Why this is a problem I’m not sure. No one outside of a few luddites moan about the fact that agriculture has slipped from 90% to 2% of employment over the last century (numbers pulled out of my butt, but should be pretty close).

15

It depends on what you think the purpose of government is. Many of us think the government’s main purpose is to preserve freedom and to let people make their own choices. If I want to buy a Japanese TV or car, I don’t want the government telling me I can’t do that. Once the government starts trying to micro-manage the economy, you turn the economy over to the political process.

Even aside from that, economists will tell you that whenever you try to protect or subsidize some subset of workers, you do that at the expense of other works. Subsidize steel workers, and you make cars more expensive. Subsidize corn, and wheat farmers are penalized.

There are not many things that economists agree on, but the overwhelming consensus is that trade restrictions hurt more than they help.

16

I guess I worry more about large, international companies than my democratically elected representatives, but mileage varies.

17

I don’t think it’s one or the other. There are some things I trust more to the government, and some I trust more to the market. And there are certainly many opportunities for corporations (or Mom and Pop stores, for that matter) to commit crimes.

When it comes to what should be done about disease, I trust doctors and scientists, not the government. When it comes to what should be done about the economy, I trust economists, not legislators. In both cases, I want the latter to take advice from the former.

18

Dan: I don’t mean to overstate the case, and I’m sure there are some, limited instances when you’d get economists to agree that government directly interfering in the market might make sense. But in general, no.

So a better way to debate this really would be to talk about specific things you’d like the government to do. Which industries or sets of workers do you want the government to “protect” and how do you propose to do that?

19

The destruction of regulation and the repeal of regulation laws ,which favored only big business at the expense of safety and the consumer, certainly shows you who the politicians work for. From Glass/Steagal to the removal regulation of off shore oil well oversight ,it is clear who ran the government. The American consumer had very little to say about how the government was being run. The power of the corporations to even get tax breaks for shipping jobs abroad costing American workers both their jobs and tax money is another example. The power had shifted to big money and they were going to wield it ruthlessly.

20

Enron linked to California blackouts - MarketWatch Enron was one of the first to show what they could get away with. They shut down the electrical grid causing rolling blackouts in California during a time of low power use. They jacked up the prices and got away with it. When the governor, Davis< said they should be prosecuted ,he was red=called opening the door for Arnold. Yet the Enron stars got prosecuted for stock fraud and cooking the books. You don’t defraud the big people and get away with it. But screwing the people is a time honored tact that you can do with impunity.