Don’t go out on a limb there. Somethings are better done by govt and some better handled by the market, but when the govt does have to act it should listen to experts. I think we can all pretty much get behind that.
What do you mean by “when the govt does have to act”? I’m trying to say that the experts are telling the government not to “act” at all wrt trade restrictions. And I don’t know who is included in “we”, but I think most Americans would prefer that the government put some restrictions on trade. Politicians get a LOT of mileage out of railing against corporations “shipping jobs overseas”.
If the rest of the world played fair with regard to trade, I would support lowering barriers. But they don’t. As a result, the govt needs to make decisions on what the right balance is. Do you think economists would advocate the US unilaterally having no trade restrictions? For example, should we allow the import of goods made by slave labor in Chinese prisons? How can American workers compete with that?
And yes, I know the United States has it’s barriers to trade as well. The difference in the United States is that are policies reflect the needs of business more than workers.
Can’t speak for everyone, but I sure do. The U.S has allowed the Chinese to manipulate its currency and contribute to a widening of the trade deficit and less economic uncertainty at home. When any country is gaming the system then the penalties for doing it should be both unbiased and swift; otherwise, there’s no incentive for any other country to play fairly, either.
China is a sovereign nation. They don’t generally ask permission from the US to do anything.
Of course. I don’t expect the U.S to dictate Chinese policy but I do expect the U.S to pressure the Chinese to play fair. If Chinese don’t want to play fair, the U.S should take its ball go home.
Well yes, but China has been under heavy diplomatic pressure from both the US and the EU to let their currency float for a long time now. The Chinese government apparently doesn’t care that the rest of the world doesn’t like their monetary policy. Just seems odd to me to complain about US “inaction” here where they’ve been doing about as much as possible this side of starting a trade war that everyone would lose.
Wait, can you reword that? Are you saying that the U.S has unfair trade? If it does, can you give some GQ-style examples on what the U.S is doing that comparable to the manipulation of Chinese currency? Every quarter the U.S bleeds wealth to other countries and for what? If the U.S was acting upon the interests of its citizens, it would erect the same barriers to Chinese companies that China imposes on U.S companies.
[quote=“Honesty, post:28, topic:553302”]
You misunderstand. I’m not saying that the US is engaging in unfair trade practices vis a vis China. What I’m saying is that the US and EU are both pushing China to stop it with the currency manipulation already, but China doesn’t care about their disapproval. The next step the US and EU could take would be some form of retaliatory sanctions (more or less what you’re suggesting) but I believe that doing so would harm the US (and EU) to an extent greater than any likely gains, and hence counterproductive.
As was noted above (or was it in another thread?) we have a mechanism in the WTO to deal with that.
Generally, yes. For exceptions, see below.
Depends. Is it really “slave labor”? If so, then I’d say no, but that’s also something the WTO should be able to deal with. If it’s legit prison labor, where the prisoners are paid, even low wages, then I say yes.
Still, what percent of goods imported to the US are made with prison labor?
They can’t, but that shouldn’t be the criterion for deciding. There are lots of ares where American workers can’t compete.
I hope you weren’t including me in that either. I explicitly stated why I argued the side of isolationism in that thread. To evoke solutions for what are IMHO problems with free trade. I do not think free-trade has actually occurred on a level playing field either. But I don’t think you are arguing that we should maintain ‘free-trade’ where we are excluded from markets. Maybe we disagree on whether we are being excluded or not. I would also point out that as long as we are suffering from a trade deficit, it is a net loss. That is not to say that the loss will continue until we have nothing left. But I think we need to concentrate on improving our side of the equation. Somebody pointed out that the trade deficit is shrinking, which is a good thing.
Well after taking a quick scan of that thread I think you must be talking about me. Despite the fact that I offered numerous disclaimers that I didn’t believe in isolationism, and didn’t think it would work. I saw very little else that could be categorized as actually advocating for isolationism. But I did see the advocates of free-trade insist that it must be working because it has to work in theory, and little discussion of how free-trade relates to actual problems in this country. Which is something you seem to continue in this thread. Are you arguing that free-trade always works, even when it doesn’t?
I’ve not been a partcipant in these previous threads that you’re referring to, but let me state my position anyway. Does free trade lead to lower prices. Sure does. I can go to a shopping mall and get a pair of shorts for ten dollars, which in inflation-adjusted money is substantially less than I’d pay for the same pair of shorts thirty years ago. So, as long as I’m not hung up about the fact that these shorts were probably made by sweatshop labor, I’ve saved money. Whoop-dee-doo. Hallelujah. Let’s get some champagne and have a party.
So what’s the cost? The cost is that the manufacture of these shorts no longer supports high-paying unionized jobs in the United States. The cite by Gorsnak shows that manufacturing jobs have been in decline in our country for a long time.
So you tell me that overall the advantages of lower costs outweight the disadvantages of those lost manufacturing jobs. I disagree. Fundamentally, jobs are the basis of the American economy as we understand it. If we don’t have a large number of high-paying jobs in the United States, then eventually we will not have a prosperous middle class. Eventually our standard of living will go down.
At the moment, we haven’t seen any disasterous decline in the middle class, despite what you may have heard from Lou Dobbs. But let’s consider our situation. We have tens of millions of people in middle class jobs such as managers, doctors, teachers, accountants, lawyers, government bureaucrats, and various other people who provide services to each other. But we cannot maintain an economy forever by having those types of people endlessly circulating money among each other. There needs to be a base that is actually generating new wealth to inject into the system. Traditionally that base has been manufacturing, along with mining, lumber, agriculture, etc… Those industries actually produce materials and turn materials into useful things that are worth having. If the base vanishes–and it is in the process of vanishing–eventually the white-collar, middle class jobs that sit on top of it will vanish too.
While globalization began a long time ago, the migration of big numbers of jobs to China and elsewhere really began in the late 70’s and picked up steam in the 80’s and 90’s. Now through the 80’s and 90’s our economy was powered by a rising stock market and tech sector, but not anymore. Through the past decade it was powered by the housing market, but we all know how that played out in the end. Now it seems we may be reaching the end of the rope. There just aren’t any more bubbles that can keep the economy afloat as manufacturing jobs continue to vanish. Anyone who’s picked up a newspaper lately knows that unemployment is around 10% and there doesn’t seem much chance of it going down anytime soon.
So, in summary, I would happily pay more for those shorts if by doing so we could get the basis for our economy back.
Let me clarify my position from that previous post a little bit. On free trade vs tariffs, just as on many other issues, I have philosophical differences with the government and big business. I’m sure that many of our leaders believe that free trade is a new benefit to the country, and for that matter I’m sure the relevant leaders believed the same thing about warrantless wiretapping, war in Iraq, censoring scientifc warnings about global warming, and so forth. It’s possible for their to be differing rational positions on these issues.
As for whether businesses can break even or do better in international trade, I’m sure many have done well, but the point is that trade impacts much more than just prices and profit sheets. Among the other impacts that we should be considering but usually aren’t, there are:
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Loss of national security. If our entire way of life, from daily food and clothes to major weapons systems, is dependent on foreign countries, those foreign countries have a powerful way to wage war against us without firing a shot; they can simply cut off our supply of necessities. And since much of our junk is made in countries that may someday turn hostile (China comes to mind), that’s a potentially big problem.
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Loss of sovereignty. By signing treaties and joining organizations such as the WTO, we no longer can make our own decisions, even about purely internal matters such as subsidies.
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Loss of community. A great many American cities were built up around factories, mills, etc… When the economic center of such a city shuts down, the entire city usually goes downhill.
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Moral compromises. When our economic goods are made in foreign sweatshops, we can no longer control the conditions in those sweatshops, and we share responsibility for operations that keep people in bad conditions.
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Environmental issues. Shipping junk halfway around the world requires lots of fuel.
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Business size. A global economy is naturally much more beneficial to huge businesses, a local economy more beneficial to small ones.
Is selling our technology overseas so that overseas companies can produce the cheap goods they are selling us, beneficial free trade? Should we sell the whole country to China so they can rent it back to us at a low price?
And for those who believe international trade occurs on a level playing field, does that include US providing almost all of the cost of security that enables that free trade?
You forgot: consumer safety: in the past years, we have seen that China has exported products including:
-poisonous baby formula (contained melamin, a plastics filler)
-poisonous dog foods
-tainted fish and seafood, including rotten canned fish
-drywall which outgasses sulphuric acid fumes
-defective electrical equipment
Now people are seriously entertaining the idea of buying drugs and vaccines made in China-would you trust your life to a country that counterfeits products and sells poisonous food for children???:smack:
Until which point that everyone has everything they want or can afford. Then we all end up like the defense contractors, who need a war every few years or they run out of “customers” for their product.
What would we do with any surplus goods, or what would happen to the people who build them when there is no more market?
I think it is a mistake to ask “Does America benefit from free trade”. The question would be more relevant if put “Which parts of Americas society benefit and which don’t”.
I find this quite doubtful. (And I’m not one who caucuses on the anti-government side of the aisle. 
)
One can argue that pro-business policies which tend to increase GNP will also increase average personal income, but there is a complete difference in emphasis between helping American business and helping American citizens. Much U.S. economic policy is clearly aimed at the former.
Perhaps the clearest example to demonstrate this is the banana trade dispute in the 1990’s, a major focus of U.S. government trade negotiators. But American bananas are not grown on U.S. soil and are not processed by U.S. workers. The U.S. government “went to bat” for Chiquita, Dole and Del Monte because these companies are traded on a New York stock exchange and largely owned by U.S. investors.
Health reform showed that the US government will put the interests of powerful companies above the public. A public option would’ve saved hundreds of billions of dollars over the next few decades. So would medicare negotiations and reimportation of meds from overseas. However all were blocked. So policies that were good for the public (by keeping health costs low) but bad for powerful corporate interests were shot down. So it has happened.
As far as free trade, there is going to be pain and I don’t see why noticing the pain is somehow wrong or bad. As China and India catch up they can consume more and contribute more to solving the worlds problems (medical, energy, scientific, etc). But international trade does seem to undercut the leveraging power of labor and suppress the middle class in the developed world as a result.