Free Trade: Fight It, or Embrace It

[dmek25]

Originally Posted by Schneed10

I think if you're going to take a hands-off approach in foreign policy, you have to take the same hands-off approach when it comes to telling other countries what their labor laws should be. Otherwise you contradict yourself.

i disagree. we have a ton of the Saudis money pouring into our economy everyday. it is a proven fact that they support terrorist camps in Saudi Arabia. our administration doesn't seem to have that big a problem taking their money

[Schneed10]

Originally Posted by dmek25

i disagree. we have a ton of the Saudis money pouring into our economy everyday. it is a proven fact that they support terrorist camps in Saudi Arabia. our administration doesn't seem to have that big a problem taking their money

I don't think you're hearing me. Or maybe you're just skipping past what I'm saying. What Bush and his Administration are doing has nothing to do with your philosophical beliefs and arguments. If I read you right, you're saying that to take manufacturing jobs to other countries, we should expect those countries to enforce American labor laws. Otherwise, we should deny those people the manufacturing jobs our companies can bring.

But at the same time, we should expect our government to allow other governments to rule however they choose, even if it's dictatorship?

It just doesn't add up.

[dmek25]

that i agree with. it doesn't seem fair that the C.E.O's keep getting bigger and better bonuses. while the ordinary Joe's basically have to take a pay cut, to keep their jobs

[GTripp0012]

Unfortunately, the American consumers seem to prefer a lower cost over quality in production. I, personally, am not like that, but that's what the market values--so it's tough to prevent the people from getting the benefits/consequences of the choice they made.

[FRPLG]

At the end of the day isn't this a simple economics problem? Or maybe not so simple? I think Schneed made a decent economic argument as to why free trade is what it is and how it works and I haven't seen much of an argument against it. At the end of the day after all of the emotional and moralistic arguments are made economics rule. We could try and use policy to even the playing field labor wise but economics wise it won't work in the long run. Rather than debate what is right or wrong I think what needs to be figured out first is what actually works. Or even if there is any real economic problem with the current state of free trade.

I'd support an even field in terms of tariffs because it drives me nuts that it is so uneven. That type of external force on the free market is destructive and should be balanced.

[Schneed10]

Yeah this is about making the most money possible for our country. Some of what I say in this post may hit home for those in manufacturing positions, but skirting around the issues only serves to inhibit our understanding of the economic principles involved. Here's what happens with free trade:

Country A has highly skilled and highly educated workers, and thus the cost for their services is high. To make a widget in this country, it costs $20 per widget.

Country B has workers with few skills and little education, thus the cost for their services is low. To make a widget here, it costs $5 per widget.

Anyone making a widget would choose to make it in Country B and market the widgets to Country A. So Country B benefits by:
- Having plenty of jobs available that pay more than what they're citizens are capable of earning now.
- The increased wages in Country B means improvements in standard of living, greater investment in education, and the further development of skill sets in Country B's children. So because of these jobs, the children of country B's workers will get a better education, and add skill sets, allowing them to compete for even more jobs in the future.

Benefits to Country A:
- Cheaper widgets. Much, much cheaper widgets. In our modern economy, this plays out in the form of low inflation (we've managed to keep inflation at historically low levels for the last 15 years).
- The money we save on our widgets means consumers have more money to buy and invest in other things. Standard of living improves. More money is available to invest in education. Etcetera.

Country B is where America was during the 1800s and early 1900s. Country A is where America is now. Reason? Our workers have gained skill sets and education made possible by making a good living as a developing nation. In a nutshell, Americans are too highly skilled to be wasting our time manufacturing widgets. Our skills can be better used by managing the Widget Factories overseas, or as lawyers, doctors, researchers, accountants, insurance adjusters, salespeople, teachers, media distributors, etcetera.

Our country has moved ahead when it comes to skills. To live in this country and miss the boat when it comes to developing your skill sets to meet changing demand for services is a tough way to live. If your skills aren't keeping up with our country's progressing economy, I can see why that's a very emotional problem. But that's what economics is all about: competition.

Manufacturing is on the decline in this nation. It's a tough deal. But that's the direct result of our collective skill set developing. To inhibit that competition only serves to put us at a disadvantage. You want to keep the manufacturing jobs here? OK, it will cost our companies $20 per widget. Widget prices will go up, and we'll have no extra money to invest in education and our standard of living will stall. In the meantime, Country B is SOL, they don't get the manufacturing jobs. They're stuck in their crappy standard of living, with no new money available to invest in skills and education.

And the end result is the world makes no progress.

Free trade and competition are necessary for the world to make progress. The tough thing is some people naturally don't compete and get left behind. And that's sad because they struggle. But it would be even worse if our entire nation struggled to find ways to fund a good education for our kids.

[dmek25]

scheed, i hear what you are saying. i just don't believe its in the united states best interests to be the worlds policeman. if we are ask, that's one thing. but to go into Iraq, and force our beliefs upon a lifestyle, isn't in our best interests. in that case, why aren't we invading North Korea? there are plenty of dictatorships thru out the world. why just Iraq? I believe all business should play with the same set of rules. the Chinese are very innovative. you set certain guidelines, in order to compete, and they will adjust. it makes me sick that the American company always has to be the one doing all the adjusting. its just not fair

[Schneed10]

Originally Posted by dmek25

scheed, i hear what you are saying. i just don't believe its in the united states best interests to be the worlds policeman. if we are ask, that's one thing. but to go into Iraq, and force our beliefs upon a lifestyle, isn't in our best interests. in that case, why aren't we invading North Korea? there are plenty of dictatorships thru out the world. why just Iraq? I believe all business should play with the same set of rules. the Chinese are very innovative. you set certain guidelines, in order to compete, and they will adjust. it makes me sick that the American company always has to be the one doing all the adjusting. its just not fair

Actually, you wouldn't like what would happen if every country had to enact the same labor laws we have here. Prices for everything would be SO much higher. Your standard of living would take a direct hit because of it.

[dmek25]

Originally Posted by Schneed10

Actually, you wouldn't like what would happen if every country had to enact the same labor laws we have here. Prices for everything would be SO much higher. Your standard of living would take a direct hit because of it.

i dont disagree with this. but the american workers future would be much more secure because of it. ill take higher prices any day of the week, if it means 10 years from now i still have my job

[Schneed10]

Originally Posted by dmek25

i dont disagree with this. but the american workers future would be much more secure because of it. ill take higher prices any day of the week, if it means 10 years from now i still have my job

Problem is that anybody outside of the manufacturing sector would disagree with you, from a purely financial standpoint. Aside from manufacturers, not too many people would willingly accept 8-10% inflation just so manufacturers could keep their jobs. Most in the country would ask that manufacturers simply find another line of work.

[FRPLG]

Originally Posted by dmek25

i dont disagree with this. but the american workers future would be much more secure because of it. ill take higher prices any day of the week, if it means 10 years from now i still have my job

the problem with this is that having that job will mean so much less because prices are higher.

Economics as a guide utilizes the macro view while what you are focusing on is the micro view. Schneed is simply saying that for our country as a whole it would be better to continue to foster free trade in much the same way that we have been. It may be at the expense of some people but not at the ultimate expense of ALL people. Theoretically though it is the best for EVRYONE in a pure competitive environment. The key term is competition. Competition defines free trade and in competition some lose. It is its nature. Is that a bad thing? I guess that is the ultimate question that we constantly face in this country.

I would say that as to manufacturing jobs leaving this country: I really don't care. It is easy for me to say because it does not affect me for sure but my thoughts go back to competition. If a factory goes out of work then jobs will ultimately be created somewhere. Maybe not in that community but somewhere. Those workers need to be able to find other work. They are probably mostly very dilligent, honest and loyal workers and people like that are in demand. If they can't find a job in their community then they need to be ready to pick up and move to where they can find a job. If an entire communtiy is ruined by a factory closing then shame on the community for laying all its eggs in one basket. Local communities all over the US pump billions of dollars a year into Economic development to avoid such situations.

Now that is an exteremly simplified view point and I don't really subscribe to that in the cold hearted way it comes accross. But I think we forget that competition means survival of the fittest which means everyone needs to be trying or they'll get left behind. I find it difficult to have much compassion for those who don't try.

[724Skinsfan]

Originally Posted by FRPLG

the problem with this is that having that job will mean so much less because prices are higher.

Economics as a guide utilizes the macro view while what you are focusing on is the micro view. Schneed is simply saying that for our country as a whole it would be better to continue to foster free trade in much the same way that we have been. It may be at the expense of some people but not at the ultimate expense of ALL people. Theoretically though it is the best for EVRYONE in a pure competitive environment. The key term is competition. Competition defines free trade and in competition some lose. It is its nature. Is that a bad thing? I guess that is the ultimate question that we constantly face in this country.

I would say that as to manufacturing jobs leaving this country: I really don't care. It is easy for me to say because it does not affect me for sure but my thoughts go back to competition. If a factory goes out of work then jobs will ultimately be created somewhere. Maybe not in that community but somewhere. Those workers need to be able to find other work. They are probably mostly very dilligent, honest and loyal workers and people like that are in demand. If they can't find a job in their community then they need to be ready to pick up and move to where they can find a job. If an entire communtiy is ruined by a factory closing then shame on the community for laying all its eggs in one basket. Local communities all over the US pump billions of dollars a year into Economic development to avoid such situations.

Now that is an exteremly simplified view point and I don't really subscribe to that in the cold hearted way it comes accross. But I think we forget that competition means survival of the fittest which means everyone needs to be trying or they'll get left behind. I find it difficult to have much compassion for those who don't try.

Excellent post. Goes right along with my way of thinking. If you lose your job you may have to face the fact that your next one may be in a different locale. Or you're going to have to find out what some of your community's "needs" are and fill that hole.

[Schneed10]

Originally Posted by FRPLG

the problem with this is that having that job will mean so much less because prices are higher.

Economics as a guide utilizes the macro view while what you are focusing on is the micro view. Schneed is simply saying that for our country as a whole it would be better to continue to foster free trade in much the same way that we have been. It may be at the expense of some people but not at the ultimate expense of ALL people. Theoretically though it is the best for EVRYONE in a pure competitive environment. The key term is competition. Competition defines free trade and in competition some lose. It is its nature. Is that a bad thing? I guess that is the ultimate question that we constantly face in this country.

I would say that as to manufacturing jobs leaving this country: I really don't care. It is easy for me to say because it does not affect me for sure but my thoughts go back to competition. If a factory goes out of work then jobs will ultimately be created somewhere. Maybe not in that community but somewhere. Those workers need to be able to find other work. They are probably mostly very dilligent, honest and loyal workers and people like that are in demand. If they can't find a job in their community then they need to be ready to pick up and move to where they can find a job. If an entire communtiy is ruined by a factory closing then shame on the community for laying all its eggs in one basket. Local communities all over the US pump billions of dollars a year into Economic development to avoid such situations.

Now that is an exteremly simplified view point and I don't really subscribe to that in the cold hearted way it comes accross. But I think we forget that competition means survival of the fittest which means everyone needs to be trying or they'll get left behind. I find it difficult to have much compassion for those who don't try.

Well-put. The micro vs macro view is definitely what separates the two viewpoints. If your job is the one at risk, naturally you're going to find it hard to focus on the greater good. But whoever is running the country, they need to.

[dmek25]

and in your comparison, sure country a will have more money in their pockets. but without jobs, they are holding on to it. thus, part of the economic mess we are into right now. people are very wary of losing their jobs. i know a ton of people that are really nervous about their financial future. in theory, more skilled people should make more money, and with better jobs. its that big transition to that period that scares the hell out of me

[Schneed10]

Originally Posted by dmek25

and in your comparison, sure country a will have more money in their pockets. but without jobs, they are holding on to it. thus, part of the economic mess we are into right now. people are very wary of losing their jobs. i know a ton of people that are really nervous about their financial future. in theory, more skilled people should make more money, and with better jobs. its that big transition to that period that scares the hell out of me

Saving money instead of spending it will temporarily hurt the economy, you're right, but the money still stays in our citizens' hands and will eventually be spent when the economy turns back around.

You'll note that even after the worst recession ever, the Great Depression, the economy still turned back around and bounced back. Same thing will happen here. Next year jobs will be back on the rise in the US, they just won't be manufacturing jobs. They'll be healthcare jobs more than anything (Uutrasound techs, MRI techs, radiology techs, nurses, pharmacists, etcetera).

But that's not what put us into a recession in the first place. We got here because too many people borrowed money when they couldn't afford to pay it back.