I’m actually sort of reassured to find someone else out there agreeing with what I’ve been saying for awhile now. The economic orthodoxy of the day-free trade-does not appear to be working for any but the ultra-rich few… but I haven’t the education in economics to be able to precisely figure out why very well and argue it concisely…I just see it and feel it.
So, apparently China’s practicing the “evils” of protectionism at home…and experiencing a huge explosion in the size of their middle class.…while we follow our business schools’ free trade orthodoxy and our middle class evaporates like a puddle on hot pavement.
Still believe no tariff barriers and a lack of government industrial policy is a great idea?
yawn Another one of these ‘trade protectionism is the way to prosperity and a bigger dick’ type threads. It’s so…retro. Substitute Japan for China and this is pretty much exactly the same sort of frantic chicken-little-ism being said in the 70’s and 80’s…well, before Japan took the long drop that they still have never recovered from.
So then why do you think you know more than the “business school orthodoxy”?
The short answer to your question is we start enacting tariffs, they start enacting tariffs, prices go up, trade stops, jobs are lost anyway and the only people who lose are the American consumers who have to pay more for goods.
For a historical reference, the Smoot–Hawley Tariff Act was enacted to preserve jobs during the Great Depression. It only served to make the problem worse.
Nope…I don’t deny that at all. As I said, you could substitute Japan for China and use your personal Way-Back-Machine to hear the same kinds of arguments then as now. The names have changed, but the trade protectionist song hasn’t really changed much, despite the fact that the vast majority of experts in the field will tell you that tariffs and protectionist measures have effects that run counter to the claims made by the uninformed in most of these threads. I think John hit it on the head either in this thread or in another similar one…this subject has become the loonie lefty version of AGW denial.
While I don’t necessarily support tariffs, there is such a thing as unfair trade. If you allow government subsidized industries to compete with domestic industries without imposing some sort of penalty on goods imported from such countries, then that industry will disappear - domestically. If the foreign government then removes the subsidy or simply decides to raise prices by a few hundred percent, you’re kinda screwed - especially if it is the kind of industry that requires a huge capital investment up front. Hence our long history of anti-dumping legislation.
Then there are also the types of industries that could be considered essential to national security. Even in a situation where there are no foreign governments subsidizing that industry, you may still want to provide some protection to your own domestic suppliers.
However on the other side of the issue, it can be argued that all governments subsidize a variety of industries in a variety of ways. I’m not familiar with the details, but I think it can be argued that the US subsidizes agriculture in ways that artificially reduce the price of grains and therefore other products such as beef, poultry, etc.
What the argument really comes down to is whether or not your economy will see a net benefit from pursuing free trade policies. The traditional argument is that it encourages the efficient allocation of resources - from a global perspective. I suspect that is probably true. However the transition costs that accompany these sorts of global shifts shouldn’t be ignored. One of those is the need to retrain people who had previously worked in industries that have been made obsolete. And on that count I don’t think you can argue that our record as a country has been anything other than abysmal.
Actually, it’s more paleo- versus neo-. Both neoconservatives and neoliberals support lowering American trade protections (while ignoring other country’s trade barriers,) while paleoconservatives and liberals are both more likely want to let America be free to do what other countries are doing to us, if they refuse to agree to actual free trade (instead of the fake “free trade” promoted by the neo-s.)
Yeah, no. protectionism is not really about the people outside, it’s about the interests of the people inside. And unfortunately, those interest don’t go away when it’s convenient for you later. In fact, they’ll be much more powerful.
To some degree, you’re right (though your political categories are hilariously wrong). What you forget is that competition is about staying economically “fit”. A short-term loss is often worth a long-term gain. Countries that engage in protectionism are staying at home and getting flabby (even if like China they are putting on weight as a whole), while those who are competing and training constantly.
If you are like China, it might be worth it to go protectionist. Maybe you want to put on the weight even if it’s mostly fat, because they’ll be some muscle and you’re awfully thin to start. There are different schools of though about that, and I’m not going to try and settle an old question here.
Foreigners conspiring to give us discounted goods is a good deal for us and a bad deal for the foreigners. The purpose of industry is to provide goods to the people. The less the people have to pay for the goods, the more money that can be spent on other goods. If the foreigners are making themselves poorer in order to make us richer, we should let them instead of trying to stop them.
From the link:
One of the poorest countries in the world is subsidizing the consumption of the richest country in the world, and this is a model we should imitate?
A modest proposal for the new industrial policy: A 10% sales tax on all good sold in the US with the money being given directly to corporations so they can reduce the prices on goods sold overseas.
This so ridiculous. Our GDP per capita is fifteen, yes 15, times that of China. At ~$3,500 China is a poor country. The vast majority of Chinese live hand to mouth, and are a long way away from what we would call a middle class existence. What you, and many others, are doing on this board is looking at a student who goes from a 5% average to a 10% one, and saying he has the better study method than the student who has had a 98% average for decades. It doesn’t make any sense. The only reason that China can post such absurd growth rates is that they were so poor to begin with.
@ Treis-The majority of the Chinese may live hand to mouth, but their middle class is equal to our entire population now-300 million.
@ Ludovic-pretty much right…Well, sort of. I actually advocate free trade only with those countries that roughly match us in wage, labor, and environmental standards, and import tariffs for states that do not have rough equivalents.
Letting products in from countries **that allow companies to freely do things that would be illegal here **amounts to an unfair corporate advantage.
I want that taken away, so that there is no benefit to offshoring jobs anymore.
Before, I have posted that it seems like there’s not the opportunity to have a good life for a lot of people of my generation…that the pool of good careers is evaporating, that I, my friends, and a lot of others will always struggle and never find the prosperity our parents have.
The kids coming up after us have even less opportunity, and they seem to know this.
So I guess the plan is just to render them supernumary to requirements? Why did you baby-boomers bother to breed us? Lack of planning again?:mad:
And middle class where I live is 50K-which can get you a decent house in a decent neighborhood…but in an area where there’s a higher housing cost, it might not be.
If you have to pay more than 1/3rd your monthly income, perforce, for your housing, because you can’t get anything cheaper, I’d define you as poor, no matter what you make.
The federal poverty level is drastically too low. It should be set by area, and by rent.
I don’t believe that at all for any realistic definition of middle class. I would define middle class as someone who earns enough to own their own home/apartment, own a car, and have a couple months wages saved. Given that there’s only about 70 million privately owned cars in China, there’s no way that 300 million can meet that standard.
Those are crappy statistics. One percent of Americans own 30 percent of the wealth. Our per capita income is screwed up.Take the ultra rich out and redo the averages. Chinas are skewed down because they have huge backwards communities that get nothing from the industrial revolution the few are enjoying. They have a billion more people than we do. They have a long way to go before they impact the outlying areas.
Yes, it is adjusted for inflation. I don’t know what it’s supposed to demonstrate. That graph makes it look like the income distribution is becoming more uniform, although the very rich are increasing in income a bit faster than the others. It certainly doesn’t look like the income distribution is bifurcating.
