>> Even now, about 95% of people who want jobs have jobs <<
my argument does not hinge on proving that free trade causes net job losses. individuals and entire communities who lose their jobs to free trade usually do find other work. but as the article i posted last night pointed out, the statistics show that these jobs are replaced with lower wage service jobs. people that used to earn a decent living in a manufacturing job end up getting a service job in the government or working the cash register at walmart--someone has to sell all the cheap imported goods to our materialistic society.
when working in manufacturing you are producing something of value. working for the government is not what i would call a productive endeavor. working for walmart means you are simply a middleman, skimming profits off the flow of goods.
tell me something. if consumerism is so productive and beneficial to a society why is it that politicians have to beg and plead with us to rack up more debt in an effort to prop the economy up via wanton spending? we've all heard it. the economy is two-thirds consumer spending. it's all about the consumer. as long as the consumer keeps spending the economy will stay afloat.
does it sound logical to you that our economy is structured so that to prosper we need to be self-centered, self-indulgent, materialistic consumers? do you think God would advocate setting up a society based on this type of self-centered, indulgent behavior? do you think the bible would advocate people being productive, as opposed to consumptive?
>> but so did the protectionists in the 30's. And no analysis can show they did anything except make things MUCH worse. <<
i was wondering when this argument was going to surface. i'm surprised it took so long. i guess i am going to have to drag out all the articles, quotes, and analysis that prove that tariffs had nothing to do with causing or prolonging the depression. i will get to it in detail later, but here are a few tidbits for now.
nobody will dispute that the famous and influential economist milton friedman is an ardent proponent of free trade.
"It played no significant role in either causing the depression or prolonging it."
--Milton Friedman on the Smoot-Hawley Tariff
here's something i just pulled off the web in a quick search. it seems like it was written from an objective point of view, not from some raving protectionist.
Tariffs, Deflation and the Depression of 1930
ak.planet.gen.nz
It was the countries that resisted devaluation that turned first to tariff protection (eg USA, which devalued in 1933) or exchange controls (eg Germany). Protection is the third way to ration imports, and there was a wave of protectionism in the 1930s.
Tariff protection actually paved the way for the recovery of the international economy. Protectionism was a result of the Depression, not a cause. Even J.M. Keynes, the most famous economist of the era (and, like Krugman, very much an internationalist), favoured "national self-sufficiency" in 1933. He saw that each country had to find its own solution, but that no country could risk a reflation unless it could ensure that the extra spending would lead to domestic employment growth.
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In 1998, the world economy is poised to go through a rather painful period of deflation. Will we learn the lesson of history: that, while the growth of tariff protection did not cause the Great Depression, it did enable the substantial recovery?
In America's case, the recovery needed much more: the devaluation of 1933 and the expenditure programme of Roosevelt's "New Deal". The Smoot-Hawley tariff acted as a challenge to other countries to look to themselves for a domestic solution, rather than relying on America's consumers to get them out of trouble.
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that last point is quite illuminating. flash forward to today. what do we see? countries in asia and latin america who have gotten themselves into trouble and so they sought to export their way out of trouble by devaluing their currencies and flooding our markets with cheap imports. dumping goods on america's consumers hoping we would bail them out of their quagmire. funny how history repeats itself.
nice work mr president on steel tariffs, for at least taking the first step in a long journey to making "a challenge to other countries to look to themselves for a domestic solution, rather than relying on America's consumers to get them out of trouble". |
