"We can take its benefits and plow them back into repairing the damage done to you..."

But we won't, because the winners don't like to give up even a portion of their winings. And many of the same economists who say things like that will fall silent at that point, or oppose 'government redistribution'.

The problem is that the advocates fall into two categories - dishonest, or naive.

> "We can't stop globalization, but we can take
> its benefits and plough them back into
> repairing the damage it has done to you. That
> includes access to quality health care for you
> and your family, expanding and keeping your
> pension safe, and some serious retraining.

We can, but we haven't once in the last 30 years.

Cranky

Response of the guy who just lost his good, middle-class, union, high-wage and benefits job:

"And a pony!"

I love the notion of letting the tax cuts sunset. The Republicans will scream like stuck pigs, but it is, after all, just the way they wrote it. Throw momma from the train!

They could care less, because it doesn't affect them. My entire profession (publishing), not to mention my company, has been outsourced to India. The work done there is less than stellar, but the quarterly profits look good for the big corporations (who, after all, are the ones promoting this).

Outsourcing with no consequences has already affected computer programming, engineering, even medicine. American corporations are moving their headquarters offshore. My gut feeling is that we are truly becoming a feudal society, with a small number of disgustingly rich lords and a huge population of serfs.

I don't know what the answer is.

Jared Bernstein: But on the upside, the Times’ Jeremy Peters reports that the falling dollar is helping to boost exports. Well, maybe not quite yet, given that the trade deficit just surprised us by coming in bigger than we expected based on the very point Peters makes

Any celebration is a bit premature.

The falling value of the dollar should make our exports cheaper relative to their imports, and that should show up as smaller trade deficits. (One problem here, not mentioned in the piece, is that the Chinese have been actively pegging their currency to movements in the dollar, so we haven’t gained enough of an advantage in their market.

The falling dollar helps except in the most important place. Great. Can you spell "currency manipulation"?

BTW, the article does mention China, though only briefly. Tell Jared to read more carefully.

Also, because of their relative sizes, our exports have to grow about 50% faster than imports to bring down our deficit.

Our trade deficit is getting smaller, except that it's not.

I don't know what the answer is.

The french in 1789 had some ideas. ;)

I'm especially fond of the prospect of retraining a 57 year-old forklift operator to be a computer programmer. Or actually, the way outsourcing works, maybe it's more a matter of training the computer programmer to operate the forklift.

My only problem with Bernstein's answer, then, is this: It's more or less the same answer we've been hearing for the past 15 years.

Kevin, since none of the big government socialist program you want have been passed, perhaps you should consider Americans don't want them? America is a democracy. If people wanted those programs so badly, it would've happened by now through elections, but it hasn't. I suspect most America are quite happy with the current strong Bush economy. They see prices have been lowered on products, inflation has slowed down, and jobs are plentiful because of free trade. I think your attempt at class warfare and attacks on the non-white people outside America who have benefited from free trade are beneath you.

Since President Clinton negotiated the North American free trade agreement, employment has increased, the unemployment rate has been low, and federal tax receipts have surged. In particular, tax receipts surged after Bush cut the tax rates. In fact, the Treasury ran an enormous surplus of $178 billion in April on record receipts of $384 billion, which was 22% higher than last year.

Some people think our economy is doing well despite freer trade and lower taxes. I think the economy is doing well because of freer trade and lower taxes. If we increase taxes the eocnomy will stall. We will be less able to afford the increased benefits Kevin would like to see.

One other point: when jobs move overseas, some workers are hurt, but, all oonsumers are helped. We all benefit from cheaper prices on clothing, electronic goods, and a host of other products.

A world without Republicans. Think about it.

Kevin,

Permit me to join you in your Amen Corner!

As a Chicano, I get somewhat offended, in that the USA did not have a Plan B in mind, when Bush41 initiated NAFTA, and when Clinton successfully completed NAFTA.

At the time, I was negotiating free trade with the Republic of Mexico, with its overall effort at Plan B. Of course, for the less knowing in the USA, the Republic of Ukraine was Mexico's Plan B since Ukraine was the bread basket for the old Soviet Union.

And one of the tangential outcomes of NAFTA and detrimental to the Middle Class is that NAFTA did not address immigration in the context of Mexico's "ownership" of the tool box for organized labor. To wit, as long as the government of Mexico "owns", both literally and figuratively, organized labor, Mexico will never achieve substantive progress, and their underclass will continue to arrive onto our geographical boundaries seeking to put meat and McClures on their table. And who can blame them?

Jaango

So, free trade supporter or not...

As Dean Baker repeatedly hammers, we do not have any FREE Trade deals, just trade deals. These deals require other countries to respect our copyright and patent laws, but not, for instance, our environmental or labor laws. Industrial workers are forced to compete against the lowest paid countries, but not our Drs and Lawyers (though, suddenly, our reporters are).

The answer must include what we are going to do in any future deals that will help our workers, rather than just our corporations.

OK, I just don't get the argument that somehow free trade must in the end trump everything, otherwise we're lost.

Just as an example, there are any number of things that are outsourced today that could readily be made illegal to outsource, while in no way directly making American companies less competitive.

For example, financial services companies and carriers and any number of other institutions that ultimately cater to American customers outsource their customer service to India. If you call up Cingular, for example, you speak to people in India. Likewise these companies might outsource programming and other kinds of activities.

Somebody tell me why these companies couldn't be forbidden by law to outsource jobs when their services or products are almost entirely directed to American consumers? Yes, of course those customers would have to pay a bit more for the product or service, but that is always the tradeoff. They are in effect getting slightly more expensive services but with the benefit that more US jobs are secure -- including in many cases perhaps their own or that of a family member.

Basically, we are trading some efficiency for security. We do so already obviously when we vote for minimum wage, or any number of other governmental regulations of the economy.

Now, it seems to me that if economists could manage to pull their heads out of their simplistic mathematical models they might figure out a way to pull such thing off.

In fact, of course, virtually all economies have large segments of inefficiencies that produce corresponding security. Even globally highly efficient Japan has great inefficiencies introduced in the lifetime employment practices of its companies.

What economists can't seem to grasp, in my view, is that it is national economies as a whole, and companies as a whole, that truly face competition against other economies and companies. If we can make companies and our national economy holistically efficient, we can easily survive inefficiencies in portions of those companies and in our national economy. Indeed, it is highly plausible that the overall security enabled by certain inefficiencies creates a better sense of teamwork, which makes for a holistically more competitive company or economy. Indeed, that would seem to be the lesson from Japan.

As best as I can make out, the great limitation of economic models is that they treat all efficiencies as purely good, such as the efficiency of outsourcing customer service to India even for companies serving a completely American customer base. I get the idea that entertaining a notion that violates this rigid concept of efficiency makes their heads explode.

But, you know, maybe their heads need to explode for progress to be made in their field. After all, look at what their recommendations have wrought. Losses of tens of millions of American jobs, and a gap between the rich and everyone else that can be described only as pernicious.

You can't stop trade barriers from coming down -- you can manage the transition, though. Trade policy ought to be about forecasting the natural trend, identifying who will be displaced, and getting in *front* of the trend and getting people ready -- or putting in place temporary constraints to soften the landing.

Opening the floodgates of trade with less expensive markets will cause American workers' standard of living to drop precipitously to compete. What we want is for other countries to slowly come *up* to our standard of living, as much as is possible.

I agree re your timing point Kevin, and should absolutely add that to my rap on this. That horse should go before the cart.

Economists and policymakers are like the mathematician in the old hotel-fire joke -- they note that the winners from free trade could compensate the losers if they chose, smile beatifically and say "a solution exists!" and then go back to bed.

Imagine, for a moment, if we had a moratorium on new free-trade deals until the winners had in fact compensated the loser. (The rollback of Bush's plutocratic tax cuts shouldn't even be in the same paragraph with trade issues -- it's a purely internal matter of class warfare.)

Am I misremembering events, or were these sunsets put into the original bill (by a Republican majority) specifically because without them, the budgets would look horrible; in other words, the cuts would not have passed if they had to honestly defend the gaping hole it would put in the budget down the road. This had the added benefit that even if they couldn't pull a rabbit out of the hat and get the cuts made permanent, they would very likely get the chance to blame Democrats as either a) obstructionists and/or b) tax increasers when the sun inevitably set.

I note this comment from the Bernstein column:

Paul K articulates what I’d call the emerging lefty consensus. You don’t block trade deals, because you don’t want to hurt the ability of poor countries to export their way out of poverty.

I simply ask, is it really the primary concern of American voters whether, say, people in India profit from our economy? How popular do you think that view would be if honestly put forth before the American people?

Jared Bernstein writes today about global trade deals that hurt (some) workers

Modern pro-corporate so-called "free" trade deals don't just hurt "some workers", they hurt workers overall, and shift wealth from labor to capital. Which illustrates exactly why his prescription isn't enough:

This will mean letting the Bush high-end tax cuts sunset (a point Obama agrees on — go, big O!) and using that revenue to help you.

Letting the Bush high-end cuts sunset is, of course, a no brainer, but the pro-capital bias of so-called "free" trade isn't just a factor of the Bush tax cuts, it existed before them and will continue to exist if they are removed. They exist because the agreements serve the interests of capital in the absence of tariffs and the freedom to move production to wherever the total cost of production and distribution to market will be lowest, while simultaneously undermining the interests of labor by guaranteeing that working conditions rules are a cost that can be avoided simply by relocating (they have similar effects with regard to the environment, as well.) That's why fair trade is needed.

The distributional effects are made more pronounced, of course, where they interact with tax policies which already favor capital, as the federal tax system in the US (even aside from the Bush tax cuts) does quite strongly. Demanding trade reform to assure that trade is not merely "free" in ways which favor capital, but free and fair is necessary, but given the existing trade infrastructure perhaps something of a long-term project in changing attitudes worldwide in restructuring existing relations. But fixing the preferential taxation of capital, which is far more than just reversing the high-end Bush tax cuts, is an essential domestic component of counteracting the harms done to labor by "free" trade.

And, sorry...as Alex says, the Peters article does mention China's currency peg, so I withdraw that critique. (Although, I think he could have given greater weight to that point--it's poses a big challenge to an market driven exchange-rate solution to the trade deficit.)

I'm especially fond of the prospect of retraining a 57 year-old forklift operator to be a computer programmer. Or actually, the way outsourcing works, maybe it's more a matter of training the computer programmer to operate the forklift.

The way outsourcing works, its more like retraining both to be hairstylists or housecleaners.

Those debating trade must separate manufactures from services. For example, we cannot place tariffs on an Indian programmer working on a database in New Delhi. But we can place tariffs on automobiles imported from Japan.

There is another difference between services and manufactures. The difference is that, while the globalization of certain services, such as computer programming, is something new that has occured as a result of new technology, the globalization of manufacturing is actually quite old.

Over a century old, in fact. During the late 1800's, Great Britain adhered to the free trade dogma of her intellectuals, just as the U.S. is doing now. Although the U.S. and Germany would place tariffs on imports from Britain, Britain refused to retaliate with tariffs on imports from those two rising powers. The U.S. is following in the Mother Country's footsteps when it comes to the trade deals she pursues today.

The point is that, although certain aspects of globalization, such as the globalization of the information sector, are inevitable (as Senator Obama noted, the only way to prevent globalization in these sectors is to confiscate every computer on Earth), there are other aspects of globalization that are not inevitable, such as manufactures.

What this means is that the American people have more freedom to pursue their patriotic interests with regards to the manufacturing aspect of trade. If it is deemed necessary to return to a more traditional American trade policy with regards to trade, one that would demand tariffs on manufacturing imports, this could be achieved. In short, not all aspects of globalization are inevitable.

Those debating trade must separate manufactures from services. For example, we cannot place tariffs on an Indian programmer working on a database in New Delhi. But we can place tariffs on automobiles imported from Japan.

We can place tariffs on either, whether we should, and under what conditions, is another question. Tariffs on services are quite possible, and really no more or less desirable, categorically, than those on manufactured goods.

There is another difference between services and manufactures. The difference is that, while the globalization of certain services, such as computer programming, is something new that has occured as a result of new technology, the globalization of manufacturing is actually quite old.

Globalization of services (e.g., insurance) is quite old too. Sure, certain services (like, again, computer programming) are themselves rather highly dependent on modern technology, and therefore could not have been globalized without it (since they could not exist without it), and globalization of both goods and services is made easier by advances in transport and communication in general, but there is no real categorical distinction between goods and services there.

A sea change is possible in the coming years. Rising gas prices, rising healthcare costs, unemployment, inflation,... All these things will open the door to a return to a more equitable and fair economic paradigm and government for the people. This may be the last chance for that; if it is not already too late. The thugs, the RW noise machine, and the plutocrats will use every dirty and disingenuous trick they know and have perfected for over 30 years. They have engaged in class warfare, of course, without calling it that, unopposed for too long.

Perhaps it is in the nature of free economics for there to be class warfare. Given the human prediliction for cupidity, that would seem to be the case. It is unnatural and ultimately unproductive, assuming that a feudal society is not the goal, for the majority of the people to not pursue their own interests via the government. It's not as if the other side has not done so, regardless of what they contend.

ex-liberal: In fact, the Treasury ran an enormous surplus of $178 billion in April

Hmmm, is there anything special about the month of April when it comes to taxes?

If we increase taxes the eocnomy will stall.

Just like they did during the Clinton administration.

when jobs move overseas, some workers are hurt, but, all oonsumers are helped. We all benefit from cheaper prices on clothing, electronic goods, and a host of other products.

Of course, under current policy, those products are being bought on a giant credit card, with the trade (current account) deficit exceeding 6%/GDP (more than twice the size of the budget deficit). Do you approve of this sort of fiscal responsibility?

If you listen to people like Maria Bartiromo you get the idea that there is nothing wrong with our economy. The core numbers are all good if you back out all the bad stuff like rising gas prices, rising food prices, stagnant wages, high consumer debt, and a flat housing market.

It is like we live in two different worlds. One enjoyed by rich Republicans like Bartiromo and the other where we all live.

For those in Bartiromo's world globalization and the Bush tax cuts are blessings beyond measure. For the rest of us (about 95% of Americans) not so much.

At this point BGRS suggests I should be a shameless blog whore and tell you to go look at my post on last Friday's McLaughlin report over at Watchng Those We Chose, but I am not that kind of guy.

I'd just like to make sure that we don't have one group that gets all the benefits while another group pays all the price.

Do you feel the same way about trade regulations? Most of them benefit some particular small class at the expense of everyone else. Say, the tariff on ethanol, the tariff on sugar, the on-again, off-again tariff on steel.

On this topic, it would be good to re-read some of Candidate Bill Clinton's speeches. Whatever else you do, you do not want to try to freeze the U.S. economy in its present state, or its recent state. Lots of people lost their jobs when the Conestoga Wagon co. went out of buseness, but we don't really want to recreate the economy that made it thrive in the first place.

Meanwhile, most parts of the U.S. have regulations in place that dramatically retard the initiation of new enterprises or the expansion of enterprises already in place. It might do at least as much good to expedite the review process for new construction as to try to protect U.S. workers from foreign competition. the regulations are well-motivated, for the most part, but they do have the unintended (I think) consequence of slowing the growth of the economy.

Well, you know, let's take on the example of developing software as a case of outsourcing.

Suppose, simply as an extreme example, it were made simply illegal across the board, from Microsoft on down, for American companies to hire programmers outside of the US.

What would be the actual consequences? Well, of course some genuinely good software developers abroad would be lost to American companies. Research organizations in other countries funded by American companies would be closed, and the innovations they might come up with would no longer go back to American companies.

But would Microsoft and other American companies lose their edge in software? I'd argue that most likely the precise opposite would happen: the American software industry would become even more dominant because it would impart its knowledge even more exclusively to other American programmers. The disadvantages that other countires and cultures already have in keeping up with American software, clearly by far the world leader in the field, would only be made greater. It would be vastly more difficult for them to make up ground if they do not participate in the American software industry.

The point is, the local inefficiencies introduced by closing out other countries (the loss of genuinely good foreign programmers) may well be made up for by the "global" effects of keeping the industry knowhow in the US. Until the American software industry as a whole becomes less "efficient" than that of other countries, this can be a positive thing for the US economy. In effect, this takes advantages of something resembling a monopoly power in software in order to sustain the American economy.

Now, this is simply an extreme example, and one that for any number of reasons never will and probably never should come to pass. But it illustrates the point that there's a lot more to the calculations regarding the consequences of free trade than simply introducing every possible micro-efficiency.

frankly0: I simply ask, is it really the primary concern of American voters whether, say, people in India profit from our economy?

That's a good question, but there's no need to debate it until you've established whether "globalization" has in fact been the driver of India's economic growth. This paper by Dani Rodrik and Arvind Subramanian argues convincingly that it's not (the paper uses actual data rather than theory).

"Globalization" of IT, call centers, etc. has benefited a handful of India's upper middle class and wealthy, but has little to do with overall growth. So the next time somebody says that shipping your programming job to India helps feed starving kids, do tell them how full of shit they are.

Meanwhile, India's commitment to "free" trade includes average 112% tariffs on food. Not that I blame them - with 2/3 of the country relying on agriculture for their livelihood, a loss in that sector would cause unthinkable hardship. It does however show that "free" trade is not always a great idea, and that our trading partners don't practice it anyway.

A reverse tariff paid by the exporter of jobs as a percent (20-30) of the wage savings, which is then transferred to those who lost their jobs.

brian: For example, we cannot place tariffs on an Indian programmer working on a database in New Delhi.

We can do that by taxing international money transfers. but would we want to? It would make most business in the U.S. slightly more expensive (especially for someone who sells the results of the Indian programmers' work back into the international market), while protecting a small number of U.S. programmers.

Does anyone seriously propose to increase the costs of American exports?

Ah, Kevin.

There you go again.

The point is, it isn't really free trade if you begin "stalinizing" the American economy with increased social programs of the ilk you mention here. That dog won't hunt and it's mendacious of you to suggest other wise.

I believe in free markets. That means having faith that once trade is liberalized, that people are rational actors and will undertake the investments in human capital on their own and will best know how to use their money, not coughing it up to another government beauracracy.

Republicans in particular, who still control 47% of the House and 49% of the Senate, simply refuse to consider this stuff. ...So, free trade supporter or not, I'm increasingly of the view that I'd like to see us fulfill some of these promises first, and then pass the trade agreements afterward. We've tried it the other way around for a long time, and it doesn't seem to work out so well.

I agree with you on this one, Kevin.

And I see "ex-liberal" went with post hoc, ergo prompter hoc as his/her/its leadoff fallacy (with a bonus "The Clenis did it too!" reference). How many other dishonesties will "ex-liberal" embrace in this thread? We could make a Bingo game out of it...

I'd just like to make sure that we don't have one group that gets all the benefits while another group pays all the price.

But as Kevin points out, that's anathema to the so-called philosophy of the Republican Party.

jimBOB wrote: The Republicans will scream like stuck pigs, but it is, after all, just the way they wrote it.

And Bush signed, don't forget. If the Republicans want to call them tax increases, the Democrats should -- rightly- - term them the Bush tax increases.

I'll post a different reaction to the snippet frankly0 reacts to above:

Paul K articulates what I’d call the emerging lefty consensus. You don’t block trade deals, because you don’t want to hurt the ability of poor countries to export their way out of poverty.

The problem with this is, of course, that it is completely divorced from the facts. "Free trade" on the current model has not generally enabled poor countries to export their way out of poverty, it has heightened the disparity of wealth and driven massive benefits to the existing economic elites in those countries (its also done the same in the developing partners in "free trade".)

The constituency for "free trade" on the present model is the locally wealthy capitalist class in both the less and more developed partners.

I believe in free markets. That means having faith...

Please keep your religion out of public policy decisionmaking.

frankly0: The point is, the local inefficiencies introduced by closing out other countries (the loss of genuinely good foreign programmers) may well be made up for by the "global" effects of keeping the industry knowhow in the US. Until the American software industry as a whole becomes less "efficient" than that of other countries, this can be a positive thing for the US economy. In effect, this takes advantages of something resembling a monopoly power in software in order to sustain the American economy.

It has never been possible for a country to maintain a monopoly on any new technology. More importantly, any country that tries risks losing the advantages of new technologies invented elsewhere.

... when jobs move overseas, some workers are hurt, but, all oonsumers are helped....ex-lax at 11:48 AM

...retard the initiation of new enterprises or the expansion of enterprises already in place....MatthewRmarler at 12:39 PM

MatthewRmarler: Most of them benefit some particular small class at the expense of everyone else. Say, the tariff on ethanol, the tariff on sugar, the on-again, off-again tariff on steel.

That's certainly a solid argument against selective tariffs, but what about the bigger question of the value of the dollar compared to other currencies? That's what the article was about, and its effect is hardly narrow or selective.

Whatever else you do, you do not want to try to freeze the U.S. economy in its present state, or its recent state.

Or to support your consumption using a big credit card.

most parts of the U.S. have regulations in place that dramatically retard the initiation of new enterprises or the expansion of enterprises already in place.

Such as?

Trade is like any other human endeavor - if we all play by the same rules, we all have a much better chance of getting along and we all are much happier.

The problem is that the countries of the world do not all play by the same rules, and this is fine with plutocrats like Bush, who like it just fine when the playing field is slanted toward them and thier ilk.

most parts of the U.S. have regulations in place that dramatically retard the initiation of new enterprises or the expansion of enterprises already in place.

I'll help ol' Marler out with his faith-based conservatism...until relatively recently, there were regulations in place that prevented the emergence of the subprime mortgage market. Then those regulations got removed, an entire industry emerged, and benefits were had by all...oh, wait...

One should note that no country worked itself into prosperity by adopting free-trade policies. Rather, they used protectionism to help domestic industries get off the ground, and engaged in IP violations in order to adopt technologies and consume desired media without having to send wealth outside their borders in order to buy them.

That's how Korea, Japan, and the early United States did it. It's pretty rich when Americans go to a third-world country and explain to them how the rules that applied to the rest of the industrialized world don't apply to a country trying to become more prosperous now.

I recently saw a power point analysis of the Bush Tax Cuts on America. I think it is called The Bush Tax Cut's in Ecolanguage. You can find it on YouTube. What is great about the power point is that it demonstrates that the Bush Tax Cuts really do benefit the very top 4% or so of the American population while taking money from a bunch of us in the middle. The same can be said about Free Trade. Sure the folks right at the top of the food chain benefit, but does that benefit flow down to the rest of us? I think the answer is "no-no it doesn't." If you and your friends lose your good paying jobs here in America you and you your friends have lost your good paying jobs. Even if you and your bus are able to keep body and soul together by finding lower paying service industry jobs, the net result is a smaller American Market.

Unless globalization increases good paying jobs here in America all the stuff about lower consumer prices is a bunch of hooey.

Globalization might be good for the world economy. it might be good for the Bush family and their friends. But unless you can show me how it is creating good paying jobs here in America, globalization is not good for America as a whole.

Just think how bad our economy would be if we weren't in the middle of a war.

ex-liberal: In fact, the Treasury ran an enormous surplus of $178 billion in April on record receipts of $384 billion, which was 22% higher than last year.

As noted by others, that's only one month's data, though the 22% increase is remarkable. Nevertheless, the current trend is that federal revenue is growing faster than federal spending. The federal deficit for this fiscal year will be under 1% of GDP (it looks like -- about $200B -$240B in a $2.5T budget), and the annual budget may be in balance 20 months from now. Along with everything else, this is a story to follow.

Mike: This is standard libertarian spin which supposed is to counter environmental concerns and community planning. Unless you enjoy living on a toxic waste dump, it's a false choice.

Just because it is standard, doesn't make it false. The regulations do slow new growth, and it would be worth hundreds of billions annual to expedite the process, if it can be done reasonably. In San Diego county the approval process for new housing requires 8 years and drives up the cost of housing by about$150,000 per house. If it could be done in 4 years at a cost of $75,000 per house, that would almost for sure be an improvement.

"I love the notion of letting the tax cuts sunset. The Republicans will scream like stuck pigs, but it is, after all, just the way they wrote it. Throw momma from the train!"

Posted by: jimBOB on May 14, 2007 at 11:39 AM

Former Governor of California Grey Davis let a tax cut expire; the infamous 'car tax'. The benefits of that tax rollback went disproportionately to the folks with the nicer, more-expensive cars and it was designed to raise back to its previous level when there was a budget deficit.
He's got plenty of time on his hands now if you want him to tell you how well that worked, but basically the people of California impeached him for an average return of about $130 a car and a handful of magic beans.

The best "globalization" or out sourcing story I have heard in weeks is the little publication in Pasadena that is out sourcing news coverage of local city government to journalists based in India. Think talking to "Brad" at the Indian call center about your internet service is frustrating, just consider the level of frustration if "Brad" were to write for your local newspaper.

There is little the government can do, except become protectionist. That is why nothing ever happes, the damage to the individual by having government help him compete is worse than the sickness.

Why not just collect external taxes at the ports. Taxes to pay for Republican "New World Order" security services, and taxes to equalize GHG emissions.

Simply adding to the global warming (about half) caused by government helps no one.

It has never been possible for a country to maintain a monopoly on any new technology. More importantly, any country that tries risks losing the advantages of new technologies invented elsewhere.

This misses my point. What I was arguing is that we might actually extend our current hegemony by keeping the industry knowhow more effectively contained in the US. Insofar as we are dominant, we are more likely to stay dominant. We lose some knowledge and particular innovations, but the losses in knowledge to everyone else in the world is far greater.

Now, I fuly realize that what I'm pointing out sounds a bit Machiavellian because it suggests we might continue our good fortune by denying it to others across the world.

But, in fact, we choose to do so all the time, and to keep from others our own resources. When we choose to do otherwise should, I think, be an explicit moral decision, instead of pretending that somehow it all works out wonderfully for all involved, and no hard moral decisions need be made.

Matthew, Income tax filings are due in April. Some of us paid a little extra this year.

Jim7

The California car tax and the Bush tax cuts are hardly comparable. Most people barely noticed any benefit from the Bush cuts, because they were so purely targeted at the high end. They'll barely notice any increase when they expire.

By contrast the California tax hit with a highly visible, specified amount payable all at once. It was hard to miss.

MatthewRmarler: It has never been possible for a country to maintain a monopoly on any new technology.

No, but there's a big difference between accepting that reality and bending over backwards to transfer the ability to create advanced American technologies to other countries as fast as possible. That's exactly what "American" MNC's do when they establish advanced design and manufacturing centers in other countries. Especially so with countries like China that insist on "partnerships" with Chinese companies and even explicit technology transfers as the price of doing business in China. Putting that sort of government coercion into the category of "free trade" goes beyond Orwellian.

While this system persists, talk of creating new innovative technologies for Americans to profit from makes as much sense as storing water in a sieve.

More importantly, any country that tries risks losing the advantages of new technologies invented elsewhere.

Uh, who's suggesting that we don't use foreign technologies? And exactly what technologies have we imported recently from countries like India and China?

Marler, quite honestly, if my paycheck stays the same or falls, and my expenses are higher, it matters little to me that "on average" things are better. You're worshipping at the altar of GDP growth. Your argument rests on the claim that without free trade, GDP growth will not be as high (who knows?). The response to that is, "Who cares?" People care about whether their lives are better and more stable than they were before. If policies produce that, you have a win. If your policies have the opposite effect than that for a large segment of the population, then people aren't going to support them.

There's a little too much faith-based thinking here. Markets exist to make my life better. If they don't, screw them. I wasn't put on this earth to sacrifice myself for the cause of American trade policies.

Would someone please address the stuff about the approval process to build a house in San Diego taking 8 years and 150,000 extra? (MatthewRmarler post above). I'm thinking it's maybe a bit of a misrepresentation of the reality. Maybe it's about building a McMansion subdivision in an endangered species habitat or something?

This is sure to be controversial, but why do people deserve special aid. When people stop using the government to artificially increase their wages at the expense of consumers, why do taxpayers owe them anything? If anything, taxpayers should demand reparations. If someone in Africa can do a job at 50% the cost, then we've been ripped off by trade barriers. When those barriers come down, why does it make sense to want to "help" and "pay back" the very people that have been exploiting us?

alex: with the trade (current account) deficit exceeding 6%/GDP (more than twice the size of the budget deficit). Do you approve of this sort of fiscal responsibility?

I sure do. The importance of the trade deficit is an old idea from mercantilism that doesn't apply in the current world economy.

A big trade deficit means we're getting automobiles, computers, clothing, raw materials, etc., while our trading partners are getting pieces of paper (dollars). That's an excellent deal.

The best compromise on illegal immigration would come in two parts:

1. First, secure the southern border and step up efforts by Homeland Security to monitor individuals in the country on temporary visas.

Securing the border means completion of the fence supplemented but not replaced by high tech surveillance techniqes. It also means supplementing the border patrol for the next several years by the military police, National Guard, local law enforcement and by regular army engineering battalions and private contractors, which would build roads, railways and simply clear the brush.

Second, once the borders are secure and the situation with those holding temporary visas is in hand, then double the size of the Immigration and Naturalization Service and put in place a plan that penalizes employers significantly for hiring illegal immigrants, denies illgals govenment benefits of any sort and requires all Americans to report suspected violations to the INS, which would be required to investigate them immediately.

After five years or so of a secure border and rapid enforcement of the laws on illegals, then consider a plan for temporary work permits for immigrants tied to requests and pledges by particular businesses who want to hire them.

Continue to bolster the size of the INS.

I feel exploited only when someone tries to extort money from me that I need to buy for necessities. If a pair of luxury shoes cost more in a protectionist environment than in a free-trade environment, I don't really care. Certainly it would be nice to pay less for luxury shoes, but I'm certainly not being "exploited" by the luxury-shoemaking-industrial-complex. I can simply opt not to buy them. The same goes for consumer electronics, luxury cars, etc.

Also, I can hardly claim that my position in life is somehow less protected or less privileged than a factory worker's, so I'm not going to hold his middle-class lifestyle against him.

Mike: So consumers are not workers and former American textile workers, electronic assemblers and a 'host of others' benefit?

It's a question of visibility. When workers are harmed, unions see to it that their plight is recognized. When business segments are harmed, their lobbying groups raise a fuss. Each of these groups has pundits who will publicize their POV.

But, nobody speaks for the consumer. So, a lot of attention is paid to the relatively small percentage of workers and businesses that are harmed by free trade, but little attention is given to its benefit to every consumer, that is, to every American.

But, nobody speaks for the consumer.

Why yes. Just the other day I was upset about the fact that duct tape cost $1 instead of $0.75 and that my special anti-pronating running shoes cost $120 instead of $110. Also, I feel deprived because protectionist trade policies means that it costs too much for 42" LCD televisions. Were consumers suffering in some way that relief was an immediate necessity?

ex-, it behooves us to support policies in which we can quantify and specify what the consumer benefits are, rather than just wave our hands and say, "if we do this, it will be good for consumers, that's why you should support it, even if other segments of the country will suffer."

Benefits? bwahahahaha. Oh these guys are a laugh fucking riot. I didn't check mr berstein's bio but i'll bet dollars to donuts he has some well compensated tenured sinecure in academia or a "think tank" that is not subject to being out sourcing or as the berstiens of the world call it; right sizing.

ex-liberal: The importance of the trade deficit is an old idea from mercantilism that doesn't apply in the current world economy.

What's that? The idea that, like any loan, the bill for a trade deficit will come due is obsolete? Wow, I think I'll quit my job and live on credit cards.

In fact, free trade models assume balanced trade, and if that assumption is invalid, the supposed benefits of free trade generally don't exist.

A big trade deficit means we're getting automobiles, computers, clothing, raw materials, etc., while our trading partners are getting pieces of paper (dollars). That's an excellent deal.

Ah, the old "dumb furriners" approach to trade. Why are those people so stupid as to give us things in exchange for pieces of paper?

Hint: the only truly universal law of economics is that there's no such thing as a free lunch. They want the money back - with interest. Inflating our way out of the debt will likely hurt us worse than them. And, to add insult to injury, we're not only living beyond our means but losing the only thing that will let us pay back the loans - industries that produce exports.

alex, your post seems to be conflating debt with trade deficits. Trade deficits don't mean going into debt. They mean we're paying more dollars for imports than we receive for exports. A trade deficit means that other countries are accumulating US dollars.

Now it's also true that our foreign debt is increasing. That is a serious economic problem IMHO. It is like your analogy of living on credit cards.

"What would you tell some guy who just lost his good, middle-class, union, high-wage and benefits job?"

Well, just yesterday, I talked with one of the people that got laid off in 2003 (the 3rd round of layoffs starting in 2001) where I worked and he ended up reinvesting a *fraction* of his 401K into retirement, used the difference to buy a new SUV instead, pays $441/month for private health insurance plus his mortgage out of a Money Market fund that he put the rest of it in. A much smaller pot to piss in when he retires.

JimBOB;

My point about the car tax is that a relatively modest, lawful return of tax revenues to a previous higher rate was demogouged into a political bludgeon used to beat up a moderate Democrat that was trying to balance a budget. I can imagine that happening again.

ex-liberal: A trade deficit means that other countries are accumulating US dollars.

Which they then either loan back to the US (eg buy treasury securities) or buy US assets. The former is going into debt, and the latter is selling your assets to support your lifestyle. Either way it can't be sustained indefinitely. Despite the optimistic tone of the article, our trade deficit is getting worse (March was a record).

The only time that running a trade deficit is desirable is when the corresponding capital account surplus is being put into productive investments (eg R&D or factories, as opposed to tax cuts or a housing boom, which is where it's going in our case). The productive investments case is typical for developing countries (which we're not) but even that has its limits. The Asian crisis started when Thailand's trade deficit (CAD) hit 7%/GDP. Ours is now at over 6%/GDP.

Bottom line: our trade practices are grossly irresponsible.

One thing we could do is halt immigration. Do we need immigrants? No. The only purpose is to lower wages for businessmen and accumulate votes for Democrats.

One thing we could do is halt immigration.

Not with any realistic policy whose costs would be warranted even by the most optimistic idea of its benefits.

Every so often, a big headline comes out where Fortune500America's citizens start bitching about how quickly H1B visas run out for technological professionals. How American engineers and developers are mega-lazy because they won't work for $20 a day.

I'd like to see H1B visas be applied to M.D.s, lawyers, accountants, and most importantly, lazy columnists & members of the press.

After all, Indians are well educated and speak English.

tyro: I wasn't put on this earth to sacrifice myself for the cause of American trade policies.

Neither was any other American. Our present trade laws protect some people and cost others; changing them will protect some people and cost others. Policy debates depend on the aggregate effects of many particular cases. So you don't care about your fellow Americans, but you want your fellow Americans to care about you?

emjayjay: Would someone please address the stuff about the approval process to build a house in San Diego taking 8 years and 150,000 extra?

Those figures came from a speech by county supervisor Diane Jacobs. Various estimates bounce around in the press. Thorough reviews of the costs of various regulations usually reveal lots of hidden costs. To approve a modification to a land fill to recover and sell the methane takes about that long, even though the methane is generated whether it is recovered and sold or not.

No Marler, you idiot, tyro is saying he doesn't care about the financial elite. Which make up less than 10% of Americans. And if you weren't an apologist for class warfare you would have noticed that. But you would rather sacrifice tyro on the alter of government subsidies for the elitists. What amuses me about libertarians is how much government intervention they are willing to tolerate when it means the creation of this artificial concept called "markets" but then scream bloody murder when asked to compensate those whom the market fails.

Kevin,

Wish you'd apply the same analyisis to comprehensive immigration reform.

nole: No Marler, you idiot, tyro is saying he doesn't care about the financial elite.

In the line that I quoted, that wasn't what he wrote.

But you would rather sacrifice tyro on the alter of government subsidies for the elitists.

That isn't what I wrote. I wrote that current trade policy benefits some and costs others, and any change will benefit some and cost others.

right now we have a tariff on ethanol. Is that really better for the common good than free trade?

There isn't anything artificial about markets. They were created by independent citizens. Government control is what is artificial.

alex: Especially so with countries like China that insist on "partnerships" with Chinese companies and even explicit technology transfers as the price of doing business in China. Putting that sort of government coercion into the category of "free trade" goes beyond Orwellian.

That's a fair point. I did not put such practice into the category of "free trade", and it is a problem.

alex, I meant to add that our current restrictions on immigration from China harm us at least as much as they harm China. Chinese immigrants are a source of much or our technological strength, and we should be assisting their immigration, not impeding it.

Marler you illiterate twit, the basic point that "free" trade is all about benefiting the financial elite. Do you know why my lines weren't in quotes? Because they were paraphrases. And if you think the government isn't the source of these artificial markets, try running an economy without governance. Who will enforce your property rights? Who will print your money and ensure that it is something other than worthless scrip? Who will protect you and yours from the unwashed masses when they come to murder you in your sleep because you are the richest asshole in the neighborhood owing to the fraud you've perpetrated on them?

In other words my interpretation of both your imaginary "free" market and tyro's concern that he would be fucked over for the crime of being part fo the hoi polloi, rather than the super wealthy for whom you believe the government should work, were correct.

Ya' just gotta love the wrong-headed anti-immigrationists?

If it weren't for the immigrants sending their hard-earned dolllars home to their nation of origin, we'd all be paying far more in foreign aid to these countries facing economic destitution.

Of course, left out of this equation, is the notional that white kids and the kids of racial and ethnic minorities, are not likely to enlist in the military. Consequently, who is remaining that is desiring to defend America? Perhaps, consideration should be given the white, male, conservative and over 40 years of age, while in need of a constant "make-over" due to baldness as well as his lunacy and advocacy for "bad" public policies.

So, be gentle to these anti-immigrationists for they know no self-restraint.

From the linked article:

"Paul K articulates what I’d call the emerging lefty consensus. You don’t block trade deals, because you don’t want to hurt the ability of poor countries to export their way out of poverty. But too many of these deals end up being made between our rich people and their rich people, boosting investors’ income and leaving workers out of the picture. So putting labor standards in the deals—let unions form, no child or slave labor—makes sense, but don’t expect it to work miracles either."

The most important sentence there: "But too many of these deals end up being made between our rich people and their rich people, boosting investors’ income and leaving workers out of the picture."

"...To wit, as long as the government of Mexico "owns", both literally and figuratively, organized labor, Mexico will never achieve substantive progress, and their underclass will continue to arrive onto our geographical boundaries seeking to put meat and McClures on their table. And who can blame them?"
Posted by: Jaango on May 14, 2007 at 11:51 AM

You bring up some very important points. Trade agreements which primarily benefit only the *traders* and not the working people involved in the trade don't benefit either nation very much. You would need *political linkage* between the exporter and importer to insure that enough benefit goes to the exporting laboring class to boost their consumption as well as the importing country's consumers. Without a world government, world trade deals are generally going to benefit capital nearly exclusively, until the world economy crashes as a result of the hollowed out middle-classes of the consuming countries unable to afford imports. So, absent a world-government with policies to regulate in the interest of the masses of people in both producing and consuming countries, "free-trade" deals are not in the interest of the consuming countries labor and don't benefit labor in the producing ones.

tyro: I wasn't put on this earth to sacrifice myself for the cause of American trade policies.

That statement is equally true of all Americans and all proposed trade policies. Whether you support or oppose the tariff on imported ethanol, you were not put here on earth for the cause of the ethanol tariff. Somebody benefits from the tariff, and somebody pays; if the tariff is removed, someone else benefits, and someone else pays.

Same with all other trade restrictions: those that might be imposed, and those that might be removed.

So, if you oppose "free" trade, who pays for the barriers that you support? Most likely, the barrier harms the common good, as in the ethanol tariff. Not necessarily, as shown by the example alex noted of China's requirements for technology transfer. But most barriers are the result of agitation by a tiny fraction of Americans, and they drive up costs for all others. The sugar tariff harms America's candy manufacturers, but benefits at most a few dozen families.

MatthewRmarler: alex, I meant to add that our current restrictions on immigration from China harm us at least as much as they harm China. Chinese immigrants are a source of much or our technological strength, and we should be assisting their immigration, not impeding it.

I'm not aware of any policies that restrict immigration from China more than any other country. However, if you mean we should allow more immigrants with math/science/engineering skills into the country, that would make sense if the loss of R&D, advanced manufacturing (eg computer chips), etc. were caused by a shortage of appropriately skilled labor. However, a look at the unemployment rates for programming and engineering, total number of people employed vs. time (past, current and projected), shows that a shortage of people is not the problem.