The ideology of "Free trade" is Killing America's Economy

That is just not true. Perhaps you are reading biased economic textbooks written by neo-liberal free market authors (there are plenty of them).

It also has a shortage of decent jobs.
It makes no sense to be outsourcing now.


Here are just a small number of reasons comparative advantage is not always beneficial:
http://www.tradereform.org/2011/04/how-the-u-s-economy-is-a-victim-of-comparative-advantage/

 

I don't care for your conspiracy theory garbage (a standard offering from the right wing). Your response is even more cretinous as you're replying to a comment about economies of time, an analysis that leads to the notion of multiple equilibria and therefore the gains to be had from extra-market interference

 

So what will happen when we all open up our borders to the one world economy and find there are still economic problems of mass unemployment and low wages?
No, international trade is not the magical solution you think it is.

 

One doesn't eliminate all economic problems through trade. One just increases economic activity and ensure a more rational result. Economic nationalism is built on a mountain of monkey crap

 

Warren Buffet explained the problem with continued trade deficits quite well in a short film that he made:

[video=youtube;5DvuyvuHmJI]http://www.youtube.com/watch?v=5DvuyvuHmJI[/video]


Guess what Saudi Arabia is doing with all their oil money from the trade deficits that have been allowed to go on? Buying up land.

 

There's only one problem with 'continued trade deficits' and that is the potential destabilising effects from a devaluation. Of course, as shown by simple macroeconomics, there is no need for that to happen. A trade imbalance merely reflects problems with savings rates.

 

You seem to be stating opinions as fact. No, the potential problems are far greater than just "destabilising effects". I do not subscribe to your narrow Keynesian ideology.

Economics does not show that. What a sweepingly broad statement.

Reiver, I think perhaps the factor which you are ignoring are interest rates and the dividends of capital. This will accrue to the owners of the wealth. So if there is a prolonged trade imbalance, it may not just be a simple matter of later reversing it.

 

Nothing to do with Keynesianism (given the understanding of trading imbalances is just a reference to an income identity). The problem for you is that simple economics makes that economic nationalism position look child like.

Of course it does. The problem is that you're making comment without knowledge of economics. This is required as knowledge of economics would necessarily destroy the nationalist position as irrational.

 

Free trade would triple the usa's wealth

The problem is freeing it from government meddling, rules, and democrats by getting sane people to vote them all out and getting 100% tea party small government pro success people in.

 

This doesn't show much knowledge of current affairs. The US is largely 'free trade'. Where its not there is two effects. First, a positive 'strategic trade effect' as it attempts 'beggar thy neighbour' policy to steal oligopolistic profits for the US economy. Second, support for 'unfair trade' as it harms land abundant country and also developing nation. That's the nasty aspect of the American referring to trade policy: they ignore how they, and the EU, have been so important in harming economic development and our chances of eliminating absolute poverty

 

Free trade is a great thing of course It grows jobs, (people seem to forget that we reached very low unemployment after NAFTA, and later want to argue it kills jobs), keeps costs low, and makes sure our resources are used most efficiently. No one benefits from having the value of their labor reduced to pay for some protectionist policy intended to prop up an inefficient business model.

The problem with people like Revier is they focus on "all the damage western civilization has done" without remembering all the good. Africa had not invented or known of the wheel until trade with Europe started. Latin America has no big pharmaceutical companies but has plenty of their products, Oceana didnt have a written language until Captain Cooke etc...Free trade is a great thing, has always brought nations and people closer.

America can have much freer trade. There is nothing free about waiting at a customer clearing house all day with skilled staff waiting to pay an inspection fee. I have done quite a bit of importing. Very large costs are added to imports via BS run around, and fees. US Fish and Wildlife needs there 180, customs charges $5, but takes 5 hours of your time etc...

 

While trade is generally a good thing, the question is how many jobs does it actually grow? The USA is a fairly big country. I see no reason they really absolutely need to trade with any outside country, other than tropical fruits and their huge appetite for oil.

I just think it's ridiculous that any economists are suggesting free trade as a solution to address unemployment. What happens when you have free trade and still have an unemployment problem?

This probably had to do with the economic bubble at the time. NAFTA and the high level of immigration were a big part of what fueled the bubble. NAFTA and cheap immigrant labor lowered costs, but in the long-term I believe this was disasterous, with mounting trade deficits, displaced workers, and growing levels of poverty from the immigration.

It keeps wages low

Depends on the definition of "our" and "efficiently". If by "our", you mean the people in different countries who own most of the wealth, and if by "efficiently" you mean the freest possible market, then yes, I would agree with you.

While protectionism is not exactly the most efficient, I would suggest that in many cases it is more efficient than the alternative. Efficient at creating the best standards of living for the greatest number of people.

It just seems to me that economists who simply say that free trade is good because it "creates an efficient market" are simple-minded and unnable or unwilling to consider any other economic arguments besides basic comparative advantage theory.

 

You will always have unemployment when you have a minimum wage. Getting everyone jobs is not the goal. We can ban tractors and only allow hand shovels and everyone would be employed tomorrow. We also would be dead poor. Acquiring goods through the most efficient means possible is the path to overall improvement in living standards.

The bubble burst and unemployment was still low.

To those wage owners who buy things they may see a decrease in wages b/c of competition in nominal dollars, but they should see an equal increase in what they can buy. You will notice that the many among the working class in this country have TVs, all major appliances, PS3, foreign cars etc...

I mean efficient in a competitive advantage sort of way. Why spend $120k educating a kid in public school so they can produce goods that do not have an international value of 120k? Better that they do more valuable labor. In time imbalances get fixed anyway as they buy up their currency with our dollars and then all of a sudden we have more affordable labor...

Henry George summed this up well, on the difference between embargoes and tarrifs "The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war."

Trade protections promote inefficiencies which lower the total value that can be purchased by a country etc...

Are you sure it is them? No offense, but some economists know economics. How would the nation be wealthier (in terms of what we can buy), if we reduced free trade? Much of the growth in this country and around the world is because of free trade. Our nation would be better off if we removed every import tax today, without any deal from the rest of the world. It just wouldnt be politically popular. Think about it, if others taxed our goods, it in effect makes our dollar stronger and we get more goods for longer that we probably shouldnt b/c those poor saps have to pay a tax on top of our price.

Anyway I didn't mean to insult, but to throw out a jab and not back it up with an argument...? Lets hear what would replace it and not benefit some workers at the expense of all the others.

 

There certainly is truth to this, but it is just one side of the argument.
What I greatly disagree with is the ideology the conservatives have had in recent years, trying to lower prices by whatever means possible. ( I just wish the conservatives had tried to apply this economic theory to land as much as they tried to apply it to everything else, but this is another topic )

On the other hand, I can understand the frustration conservatives have at crazy liberals who want to create some crazy blatently inefficient scheme just to help a few select people.

This does have an effect on wages and working conditions. The driving down of all costs by any means possible is what leads to the type of wretched living/working conditions that Marx criticized.

Workers in America should not have to compete with low wage workers in other countries. Not while the unemployment rate is high, and not while there have been persistent mounting trade deficits. While a few industries may be able to export to other countries, on the whole American industry just cannot compete. America will continue to be a net consumer until it exhausts its wealth.

 

Environmentalists drive up your land costs in many ways that do nothing to protect the environment. Social programs that subsidize loans for housing drove up prices...social engineering in the marketplace doesn't work. If you want to reduce the cost of homes,allow right to work, and remove many of the protections against construction labor, (including the minimum wage for people who want to train to enter the field), reduce permitting and licensing costs. Protectionism in an industry that has to be local is a fairly bad idea, time to open it up.

How so? Wages in purchasing power or nominal terms? Only purchasing power matters. Money is just a piece of paper that says you are owed a certain amount of value. Hong Kong used to make cheap plastic toys, but they lost that industry as they progressed and had a competitive advantage to make other goods, compared to places like China or now Vietnam. Now China makes state of the art computers, a decade ago they made garbage, and a decade from now they may be where Japan was in the 1980s. Economies improve, low value work will go, and that is a good thing.

 

It almost seems like there is a predictable succession of economic stages. During the 1960's-1970's, Japan was much like how China is today, exporting cheap products and then developing a technology base. Japan has serious economic problems right now. The country might have much wealth, but land prices are just ridiculously expensive, and that drives up the cost of everything else. Japan has serious unemployment problems, and many workers struggle to be able to afford housing. The recent malaise in Japan began during the late 1980's. Various economists have been racking their brains trying to figure out what went wrong with Japan's economy ever since, advancing different theories.

Not when there is nothing better to replace it.

 

They have done much more then advance policies, but Japan as an isolated island with no natural resources really has benefited far more from free trade then it has been hurt by it.

Small islands with large populations will have housing issues that subsidization of more population that cannot afford the premium to live there cannot fix. Things like rent control and the like have always hurt low income people more then helped them in the long run. Check it out, the difference between housing costs and quality in Houston which is a very free housing market and the same in San Fran and NY where the market is highly regulated and unions have to be called etc..

In any event, housing is a place where free trade doesn't even have a workforce shifting issue. Can't outsource home building so there is no shift in economies, and we sell more home building and infrastructure equipment then we buy, the scaling of construction equipment past our economy has lowered the cost of cranes and all that etc..Steel is cheaper, all that..The current market more then any other should prove that supply side economics with housing will reduce costs and make housing more affordable. More houses means less money per house, simple as that.\

Floating exchanges ensure that the money will be spent again in America. There is no other place US dollars have a real purchasing value. (OK you can buy oil, but that is in our favor.) When we buy goods from overseas, they trade their dollars in for local currency increasing the relative value of that currency to the dollar until they spend it because of demand. Eventually even if our goods and services are more expensive now they will become less expensive later, in the mean time we have free goods - which can't last forever they have to buy again from us which they do. Trade imbalances happen when the people in the other country save more then we do, but that is just reserve business for us in the future.

The issue I think you have, and I understand is that people will be caught in transition. I can see that issue. The answer though is not to impose a cost on everyone here and abroad, but to fix the problem with those workers, and encourage flexibility in the job market, and stop doing these rounds of free trade that displace workers in rounds every few years. Drop all import barriers, and shift the workforce once. I think the Negative Income Tax idea I like and push here all t he time would do that.

 

Ayn Rand had it all figured out long ago in the 50s.

Unregulated capitalism is the way to go.

Only government can tax people outside the constitution using inflation by priting money with the fed. Imagine if I printed 10Trillion lol Only government school can train kids to think government is the answer and that its ok to let lawyers take money without producing anything.

Rand Paul I pick for next president. All stuff democrats do is wrong.

 

Too bad Ayn Rand died sucking the sweet tit of the government and you are a naive little Johnny who probably should pick up books by economists not ideologues.

 

I guess the fight extends all the way to Chinese made ribbons...

http://www.asiatradewatch.com/cases/0039/case_view.html

 

Quote from Anders Hoveland:
It just seems to me that economists who simply say that free trade is good because it "creates an efficient market" are simple-minded and unnable or unwilling to consider any other economic arguments besides basic comparative advantage theory.

John Mayo, for a remedy to purely free global trade refer to:
http://www.politicalforum.com/econo...e-trade-deficit-increase-gdp-median-wage.html

For an explanation of why annual trade deficts are always immediatetely and fully detrimental to their nation’s GDPs, and also detrimental to their numbers of jobs and median wages, refer to:
http://www.politicalforum.com/econo...ts-always-detrimental-their-nations-gdps.html

For an explanation of why pure free trade is not to USA’s comparative or competitive advantages, refer to:
http://www.politicalforum.com/econo...ve-comparative-advantages.html#post1062837387

Respectfully, Supposn

 

You can keep repeating this drivel, but it won't change the fact that you're inanely abusing an income accounting identity (given all of the terms in that identity are a function of trade)

Restricting trade will, by definition, harm economic well-being by hindering specialisation according to comparative advantage. There is only one valid economic argument for protectionism: the infant industry hypothesis. The US isn't a developing country so time to catch up!

 

I can't believe I will say this, but Reviver answered it for me.

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That is 2 likes in 2 days. I don't know if you hit your head or something but we have been agreeing. Any chance you are a closet free marketer seeing if it is safe to come out?

 

An understanding of trade doesn't lead to a free market economics result. If anything it leads to an appreciation of the stupidity of the free market economics argument (as shown by the distinction between static and dynamic comparative advantage)