You doubt me? Just ask yourself how Canada will respond to US subsidies. Canada will retaliate with its own subsidies.
Unfortunately, you may be right, and that is Morck's fear, if I read his article at all competently. It certainly will make more difficult the Western Canadian project, which is to put a stake through the socialist heart. But not impossible: the Canadian federal government can't do anything to eliminate the US softwood tariff and it can provide no aid that can save the producers and workers. This is forcing BC to work on its weaknesses and we'll get huge gains from that.
I say you may be right but it's not certain. There has been vigorous debate about some very large ticket items in the socialist program. The Canadian government for years has been trying to duck paying farmers subsidies. There's even the start of a debate about the desirability of the disgraceful transfer payments to the Maritimes. Some Canadian governments have been lowering taxes. I think we're seeing two steps forward one step backward progress to defeating the socialists. This isn't great but it's better than no steps at all. It's a serious matter from a Western perspective and the country might come apart over it. There will be leverage there and it will start with the Western rebellion against Kyoto which in itself is a secessionist issue for Alberta and BC.
The socialists are dying in western Canada, are wildly unpopular in industrial Ontario, are losing traction in Quebec, and are starting to be challenged in the Maritimes. Unfortunately, there are still a lot of brain dead but walking, talking ones in Ottawa but the trend is that they're losing their influence.
What sounds like free trade is actually controlled trade.
I have to work through this.
NAFTA and EU are examples of controlled trade. Nafta has removed some tariffizing and subsidizing among its members and they seem to have benefitted as a result. (I wish they'd benefit a lot - a prosperous Mexico would suck cars off the moon).
But in the wider world, after Doha conference, it looks to me like the high tech folk, and the efficient folk, and the folk with no lobbying power have to compete, and the folk who swing weight with American and European governments don't have to submit to markets - they get subsidies and protective tariffs. Lots of exceptions and special cases are negotiated. Controlled indeed.
This appears to me as governments reaching in the pockets of taxpayers, consumers and investors, confiscating their disposable income, disrupting market operations, reducing prosperity, and attacking freedom. The effect is not only domestic but reaches across national boundaries.
The controlled trade environment of NAFTA has decreased members' subsidies and tariffs somewhat and that's maybe why the members have benefitted a bit. [??]
What sounds like the US acting anti-free trade actually promotes free
trade. You have to get away from stereotypes from the past.
So what makes the US case so exceptional? Free trade is trade unhampered by tariffs, subsidies, and BS regulations intended to act like tariffs and subsidies. Somehow, are you saying, US tariffs, subsidies, and BS regs don't hamper international trade which is about exporting to get imports and importing to get exports, and thereby getting a good position in the market?
But it looks to me like the trade-is-warfare model - a good tactic for ripping off the domestic economy without bothersome competition from foreigners.
Nonetheless, you say I have to get away from past stereotypes.
So what's the new model/description? Our tariff = their subsidy; our subsidy = their tariff? This is loosey goosey, but I guess could be seen as a wash - they cancel out. But it doesn't look like a domestic advance because the government is still taking disposable income of consumers and corporations and giving it to (eg) steel companies so they can sell at a higher price, and to farmers so they can sell at a lower price, products - which in both cases - the world is awash in. Those who don't receive the protection or subsidy have a permanent loss they can never recover to spend or invest. There's lots of downside.
There should be an upside. This is the only one I see, right now. The US economy is so large and complex that despite the effects on it of its tariffs and subsidies, it will grow and be an attractive market for ROW and if ROW wants to participate in US growth, then they have to deal with US's subsidy=tariff & tariff=subsidy by removing their own tariffs and subsidies. If they want to advantage their local producers they can do it by lowering taxes.
Is that it?
Are there other upsides?
Am I missing it altogether?
If I did get it, then Morck is incorrect with this:
Meanwhile, Mr. Bush is preparing a legacy that
may match that of Herbert Hoover, who helped
turn the recession of 1929 into the Great
Depression by setting up the towering trade
barriers of the 1930s.
And that's kind of odd, given his interests and descriptive way of going about things. Professional deformation? I wrote the following before I wrote the above.
……………………………………
Yeah, well, you had better read between the lines because that clown is a socialist who has finally learned what is finally wrong
I posted that article because I was reminded of it by the preceding posts by you, Jay and dvdw. It seemed pertinent and cheeky. Never heard of the guy until I read the article in the paper but after your post I went looking for him. I suspect he knew what was wrong even when he was surrounded by commies.
collection.nlc-bnc.ca
Look at the conclusions section. Political rent seeking section is also interesting.
See also:
post.economics.harvard.edu
CV:
finance-diploma.net
He looks to me like one of those Russian guys who got out as soon as he could and came to the capitalist paradise. He probably always knew what was wrong. I'm jumping to a conclusion; perhaps you know more about him.
I found this downright interesting:
Japanese Corporate Governance
and Macroeconomic Problems
Abstract
Japan's prolonged economic problems are due to more than faulty macro-economic
policies. We do not deny the importance of bungled macro-economic policy, but argue
that deeper maladies in Japanese corporate governance made that country
increasingly vulnerable to such problems. We argue that Japan's main bank and financial keiretsu
systems left corporate governance largely in the hands of creditors rather than
shareholders. Thus, Japanese governance practices did not assign effective control
rights to residual claimants. This, we argue, led to a widespread misallocation of capital
that mired Japan in excess capacity and liquidity problems.
post.economics.harvard.edu |
