Free Trade and Protectionism

[sparky]

I agree with your position Anach, although we may be viewing it from different camps

bottom line, we need jobs , and jobs that produce a GDP....


unfortunatly, the status quo doesn't quite get this..........

In his latest speeches on the Middle East, President Obama, both at the State Department and at the G8 meeting in France, has pledged billions of dollars in economic aid to Middle Eastern countries, drawing a direct connection between the unrest and demonstrations that brought down the dictators in Tunisia and Egypt, and the joblessness and hopelessness felt by the young people in those two countries.

His adviser on international economics, David Lipton, has been more specific, saying that, “We believe that these two pillars go hand in hand. Without economic modernization, it will be hard for governments trying to democratize to show people that democracy delivers.”

Unemployment in Egypt among young men and women is about 30%. In Tunisia, it is over 40%. The White House claims that with figures like that, the future for democracy in those countries is tenuous.

But wait a minute. What about the US? Unemployment and underemployment here is still up around 20% overall, and it is much higher among young people. Black youth unemployment fell so far in 2011 to an official rate of 44% from 50% last year (because so many young workers just gave up trying to find work)! Among Latino youth, the official unemployment rate is stuck at around 30%. Overall, youth unemployment, according to the official Labor Department figures, is 20%, but remember, the official rate does not count those who are working part time who want full-time work, and does not count those who have given up looking for work. Among young people, it may be that many who work part-time (those who live at home or who are in school or college) actually are not looking for full-time work, so that upward adjustment may not be as great as for older workers, but at the same time, there are certainly more young people who give up looking for jobs than is the case with older workers who have families to support. In any event, it is clear that all these youth unemployment figures are actually too low by a significant amount.

If the official rate of unemployment for all Americans of 9% is actually less than half of the actual rate of 20%, then even if we took a conservative estimate, simply eliminating the adjustment of those working part-time who want full-time work from the youth unemployment figure, and just keeping the adjustment for those who have dropped out of the labor force (stopped looking for work) because it is fruitless, we would still see actual unemployment figures for young people in the US at staggering Egypt-like levels: 30% for all young people, 45% for young Latinos, and as high as 66% for black youth!

So why is the president so concerned about providing economic support to boost jobs in countries like Tunisia and Egypt, in order to “support democracy,” while in here in the US, he has basically thrown in the towel on job creation efforts, and is just talking about cutting the deficit--a Republican theme?
Youth unemployment: Big US concern in the Middle East, but at home, who cares?


http://www.thiscantbehappening.net/node/637

this is the very same administration that advocates free trade allowing our jobs to slip away ....

 

[Toronado3800]

I agree with your position Anach, although we may be viewing it from different camps

bottom line, we need jobs , and jobs that produce a GDP....


unfortunatly, the status quo doesn't quite get this..........

In his latest speeches on the Middle East, President Obama, both at the State Department and at the G8 meeting in France, has pledged billions of dollars in economic aid to Middle Eastern countries, drawing a direct connection between the unrest and demonstrations that brought down the dictators in Tunisia and Egypt, and the joblessness and hopelessness felt by the young people in those two countries.

His adviser on international economics, David Lipton, has been more specific, saying that, “We believe that these two pillars go hand in hand. Without economic modernization, it will be hard for governments trying to democratize to show people that democracy delivers.”

Unemployment in Egypt among young men and women is about 30%. In Tunisia, it is over 40%. The White House claims that with figures like that, the future for democracy in those countries is tenuous.

But wait a minute. What about the US? Unemployment and underemployment here is still up around 20% overall, and it is much higher among young people. Black youth unemployment fell so far in 2011 to an official rate of 44% from 50% last year (because so many young workers just gave up trying to find work)! Among Latino youth, the official unemployment rate is stuck at around 30%. Overall, youth unemployment, according to the official Labor Department figures, is 20%, but remember, the official rate does not count those who are working part time who want full-time work, and does not count those who have given up looking for work. Among young people, it may be that many who work part-time (those who live at home or who are in school or college) actually are not looking for full-time work, so that upward adjustment may not be as great as for older workers, but at the same time, there are certainly more young people who give up looking for jobs than is the case with older workers who have families to support. In any event, it is clear that all these youth unemployment figures are actually too low by a significant amount.

If the official rate of unemployment for all Americans of 9% is actually less than half of the actual rate of 20%, then even if we took a conservative estimate, simply eliminating the adjustment of those working part-time who want full-time work from the youth unemployment figure, and just keeping the adjustment for those who have dropped out of the labor force (stopped looking for work) because it is fruitless, we would still see actual unemployment figures for young people in the US at staggering Egypt-like levels: 30% for all young people, 45% for young Latinos, and as high as 66% for black youth!

So why is the president so concerned about providing economic support to boost jobs in countries like Tunisia and Egypt, in order to “support democracy,” while in here in the US, he has basically thrown in the towel on job creation efforts, and is just talking about cutting the deficit--a Republican theme?
Youth unemployment: Big US concern in the Middle East, but at home, who cares?


Jarring Disconnect: If Joblessness and Hopelessness Undermine Democracy in the Middle East, What about Here at Home? | This Can't Be Happening

this is the very same administration that advocates free trade allowing our jobs to slip away ....

Why aid? The theory is if we can make help democracy and capitalism gain a foothold i these countries it will look good. Thus they will not get another dictator, the Taliban or xxxxxxban will not sprout up there, and the world will be a better place.

Of course I just care about keeping North Africa stable and friendly for selfish reasons. 1 it is cheaper for me to send aid than send the military. 2 my kids may someday be in that military which gets sent.

This is pretty general foreign policy stuff. Follows the idea of the Marshall Plan and Communist containment.

 

[Toro]

Again, if we were to ever go to this, I could live without the tea and books. We have plenty of fine authors here in the United States and as I said, I drink mostly water anyway.

Who cares if you can live without tea and books? Why are supporting using Big Government to limit the choices of other Americans? If you don't want to drink tea or read books, don't, but don't impose your preferences on others.

I'd rather a short, miserable life than a long one beholding to my Enemies, thank you very much.

Most of our trade is with our friends, not our enemies.

Autarky is a discredited concept in economics. Protectionism makes people poorer by reducing our choices, increasing inefficiency, and reducing purchasing power.

 

[Student31]

So you're really saying is that "ALL" means my imports while your books, tea and Perrier are just fine. That's usually how protectionism works and is why I can never take it seriously.

I said I wasn't going to banish the books. That means you can have your Bible too. I tend to drink more water (which is from Nestle, not Perrier, thank you very much) than anything else these days. I would absolutely LOVE to be able to buy everything I own American-made; even if it was more expensive and of lower quality.

I have no problem with paying a little more for an item if it is worth the price, but I have a hard time justifying spending more for an item of lower quality, even if it was made in the U.S. Once upon a time, I believe the pleas to buy American to save American jobs actually meant something because we had pride in what we produced, whether it be automobiles or appliances or whatever, and thus I think it could be justified to spend a little more to support our country knowing we were getting something good in return. Now, however, I feel like we have lost that sense of pride in what we produce many times, yet we want the American products bought so we can justify the higher wages we make. Now feel free to disagree however you want, but I grew up in a town with a large factory that made appliances for all over. And knowing many of these workers and seeing how they approached their jobs, it makes it difficult for me to even think about buying something like that.
As a teacher and a coach, I believe competition should bring out the best in us. The officials don't bail my teams out when we are getting slaughtered, and our opponent doesn't let up on us if this is the case. So in order to compete, we either need to get better, or we have to find other ways to make products that are comparable in price and quality to others on the market.

 

[expat_panama]

...we have lost that sense of pride in what we produce...

No we haven't. The way it works is everyone hears the crying baby and not the adults taking care of it. Protectionists cry for special favors and whine nonsense about how their patriotism is better than anyone else's and adults calmly deal with them.

 

[Nosmo King]

I see quite a few posts condemning free trade on the belief that it costs us jobs. If a foreign country can produce a product, service, or commodity cheaper than we can, or one that is higher quality, then either we make changes or we can't compete. If we can't compete then those jobs are lost or reduced in number, and the affected employees will then have to find work elsewhere. But it doesn't really matter if the cheaper product, service, or commodity comes from the other side of the world or the other side of the street, people are going to buy what they want or need based on the lower price.

The problem begins when the industry that is being undercut by the foreigners goes to DC and gets some form of protectionism. When that happens, you the consumer cannot get the lower priced item, you end up paying more. Which means you got less to spend on other stuff. Which means your standard of living just went down. AND, since you can't buy as much other stuff, jobs will be lost for those things cuz demand drops for them. So, we saved some jobs via the protectionisn, but lost others in other industries.

AND - what do you think those foreign countries are going to do when the US applies some form of protectionism on their stuff? They're going to reciprocate, right? So now prices go up not just on the first thing but on other things. Downward spiral, suggest reading about the Smoot-Hawley bill that was passed back in the early 1930s. Didn't cause the depression, but it did add to the problem IMHO. Do we need to be creating more enemies around the world ?

Back in the 1980s, the steel industry was facing tough competition from foreign steel makers. So they went to Washington and cried for some form of protectionism and got it. Jobs were lost anyway, for whatever reasons, but the problem was with the many other companies who used steel to make other things. A lot more jobs were lost as a result of the protectionist policy towards steel than were saved. Most people focus only on the jobs lost by a specific company that moves ops to Mexico, or when a foreign company offers something cheaper than we can. But those jobs are going down the tubes anyway if we can't compete, unless you want to subsidize them for thousands of dollars more than they're worth.

When steel sought protective tariffs, it was due to foreign steel dumping. Foreign steel was being sold on the American market at less than the cost of production. Jobs were lost. And yes, once the tariffs were in place, jobs were gained! But the Bush administration did not keep the tariffs in place for long.

What the current free trade actually provides the American manufacturing sector is the net loss of American jobs. And that, of course leads to the lowering of the American standard of living. Who can argue that the American middle class is better off today with lowered wages and benefits in a lame attempt to compete with the slave labor wages paid in Asia or Central America? Who can argue that the chance of buying cheaper products out weighs the actuality of being paid a living wage?

Free traders seem happy to erode the middle class standard of living as long as the share price of the corporations which outsourced the work remains high. That outlook certainly benefits the stock holders, but it does nothing to assure the middle class standard of living in America which has, up to the point of these greedy policies, been the envy of the world.

 

[expat_panama]

...Free traders seem happy to erode the middle class standard of living as long as the share price of the corporations which outsourced the work remains high. That outlook certainly benefits the stock holders, but it does nothing to assure the middle class standard of living in America which has, up to the point of these greedy policies, been the envy of the world.

There are a lot of happy successful people on these threads that take on this topic with specifics on import taxes and how they affect America's well being in terms of jobs and wealth. The others are unhappy failures focused on vague rants. Lot's of good hard facts out there at bls.gov or bea.gov and I'm game if you are.

 

[Wiseacre]

Protectionism is really just another gov't intervention into the free market, picking winners and losers according to who has the loudest voice and the most political contributions. Competition is stifled, and corruption rears it's ugly head.

It's one thing to go after countries for unfair practices, such as encouraging outright stealing of intellectual property or deliberately keeping the value of their currency down to prolong exports. But it's another to erect tariffs or quotas or whatever form or protectionism because somebody else can produce a product cheaper than we can without sacrificing quality.

In some respects, that's how we got into the current byzantine corporate tax structure that allows some companies to pay virtually nothing while others pay the full bill. We tried to protect a specific industry from foreign competition and as a result prices go higher than the true market value should be. AND, there are always consequences, maybe you save one industry at the expense of another. Maybe the other country(s) target products we export to them, so that industry gets hit. Great, a trade war, just what we need at a time like this. Go back and read a little bit about Smoot-Hawley and how well that worked out.