Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (2859)	10/21/1997 3:32:00 PM
From: Sam Citron	Read Replies (1) \| Respond to of 10921

Cary, <<Free trade facilitates the use of foreign labor, so I do not believe it has "helped raise the US standard of living in general.">> Trade raises standards of living in developed countries, not by raising wages, but by benefitting consumers. Guess how much your last meal would have cost without it. SC

To: Cary Salsberg who wrote (2859)	10/21/1997 4:34:00 PM
From: Sam Citron	Read Replies (1) \| Respond to of 10921

Cary, I would like to repay you for recommending Fisher's "Super Stocks". It is the work of a wily Scot, who in 1775 had the treasonous temerity to suggest that both Britain and the 13 colonies would be better off if Britain granted them independence, because of the benefits of free trade. I read this book in 1975, after spending a year in India, and came to the conclusion that it was also extremely relevant to developing nations. It is none other than Adam Smith's [Of the Nature and Causes of] The Wealth of Nations. It will change the way you think about the world, if you have an open mind. SC

To: Cary Salsberg who wrote (2859)	10/21/1997 7:34:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 10921

Cary <<The economy is in one of the longer upswings of this century and the market is booming, but most reports of real income show it unchanged for twenty years! I attribute this fact to the globalization of the economy and the pressure put on domestic wage rates by foreign labor competition. Free trade facilitates the use of foreign labor, so I do not believe it has "helped raise the US standard of living in general." At some future date, when US wage rates fall to the level of foreign wage rates, free trade will then raise the US standard of living.>> First, as you probably know, the real wages for the upper income groups have indisputably moved up. It is 'only' the wages of the lower deciles that might have been flat, but again, as you probably know, that is in big dispute. There is a lot of reason to believe that the measured inflation rate is too high by a percent or two (it takes any product 3 or 4 years to make it onto the inflation index, and for any new product that is the period of largest decline). So, even the lower income groups probably benefited, albeit less so. As for the disparity in wage growth between the two groups - I agree that this is almost certainly due to free trade. The US does not have a comparative advantage in blue collar jobs, but we do in high tech jobs. As I admitted before, there can be a severe dislocution for the people in the sectors of the economy that do not have a comparative advantage. We can, if we choose, not play this game, but the price is that in a generation we might be another India. The problem that even if we choose not to play, others will, and we will be left behind. <<Unfortunately, I believe the real cost of free trade is that the US democratic system falls far short of its potential because the government is wrested from the "people" by the monied interests.>> Please explain this. I truly do not understand what you are saying. I do not see how free trade has anything to do with the corrupting of democracy? Whether there is free trade or not, there will be big money trying to influence government? Clark

To: Cary Salsberg who wrote (2859)	10/22/1997 12:26:00 AM
From: Gottfried	Respond to of 10921

Cary, >>Unfortunately, I believe the real cost of free trade is that the US democratic system falls far short of its potential because the government is wrested from the "people" by the monied interests.<< And it was easy to wrest because about half of the people didn't bother to vote. GM

To: Cary Salsberg who wrote (2859)	10/22/1997 5:27:00 AM
From: John Cuthbertson	Read Replies (1) \| Respond to of 10921

>The economy is in one of the longer upswings of this century and the market is booming, but most reports of real income show it unchanged for twenty years! Cary, Keep in mind that such reports can easily be slanted to make the political point desired by the presenter. The economist Robert Samuelson wrote a good newspaper column on this very point last week, using as an example the statistics on "Median Family Income" from the Census Bureau. This figure does indeed show almost no growth in real terms since the early 1970's. However, upon closer examination, this is entirely due to decreasing median family size over the same period. If you examine instead the median family income for families of the same size (say families of 4 people), the numbers show quite a bit of increase since the 1970's.* Same thing is true of per capita income. Also, there is the probable overstatement of the inflation rate used in converting nominal to "real" dollars that Clark Hare referred to. The idea that the majority of people in the US are getting poorer (or even just have stagnant real incomes) is, thankfully, just plain wrong. ==John *though the peak occured for most family sizes about 1989, and hadn't yet climbed back to that level in the latest year's figures. I don't remember the actual numbers, but I might be able to dig up the article if you're interested.