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Technology Stocks : Disk Drive Sector Discussion Forum
WDC 157.75+1.5%Nov 26 3:59 PM EST
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To: Daniel Goncharoff who wrote (5579)2/16/1999 10:17:00 AM
From: Z Analyzer  Read Replies (3) of 9256
 
<<Sorry, but I think most of the comments have missed the boat on Krugman. The
fundamental assumption of protectionism is similar to the fundamental assumption of
central planning: somebody knows better than the free market.>>
Your commet incorporates the two most common mistakes people make in talking about trade:
1) People assume that trade is presently as free on the other end as it is with the US,which is a joke. Traffic on an unregulated street travels both ways, not one.
2) You assume that insisting on BALANCE OF TRADE means protecting inefficient industries from foreign competition. I believe that imported goods should be tarriffed at a rate wich brings trade into balance. Under this scenario, the US produces as much as it consumes, but those industries which cannot survive paying US wages and meeting US environmental standards AND PAYING US TAXES will perish. (Note that in countries with a value added tax, goods consumed in the country still provide a contribution to the social system instead of its being a total loss.)
As far as protection of specific industries, I will admit that I have a real problem with allowing American industries to be wiped out by targeted foreign subsidies because when those subsidies end, we no longer get bargain goods and have likely permanently lost the production. -Z
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