Protectionism --- Free Trade Poll

Good post, am. Liberalism was the laissez-faire/invisible hand approach, and the same way the word "liberal" has kind of gotten twisted in a more political sense, what is considered liberal economics nowadays is a more Keynsian approach, which tries to manage people's financial affairs for their betterment. It's actually a really paternalistic approach, which historically has been a more "conservative" way of thinking. Keynes was actually a blue-blood--House of Lords, the baron title, chairman of the Royal Opera House, which he established. Kind of what came to be known as a limousine liberal. This is a harsh assessment, and will get jumped on, but he thought most people were too stupid to make economic decisions for themselves, so they needed smarter people to manage things for them. Keynes was a brilliant man, but there is a reason why people who disagreed with his ideas about monetary policy saw what he argued for as old-time mercantilism disguised as "liberal" thought.

 

mustang, A lot to try to explain. At least 90 percent of economists--and that is a low estimate--since the days of Adam Smith have understood that free trade raises the standard of living of a country, even if the higher wages and lower prices it gives come at the expense of some people temporarily losing jobs. Most people who argue against free trade either don't have a very good understanding of how markets interact or they have a political agenda not based on rational economics.

A real world example is that IBM's ThinkPad notebook computers--which used to be made in the U.S.--are now made by a Chinese company, Lenovo. The loss of that manufucturing cost American workers, modest-paying jobs. But Lenovo's research and development is done in the U.S. -- mostly in the research triangle in North Carolina. And those are higher-paying jobs tcame to the U.S. as a result of our willingness to import cheaper goods from China. It's sort of a win-win for both countries. The secondary benefit to Americans is that our goods are cheaper--China produces things cheaper and as a result our goods cost less--so consumers have more spending power and it has kept inflation in check.

The public tends not to be very educated about the benefits of open markets. It's kind of like exercise. People don't run or lift weights because it is difficult--in the short term, it can be painful, and people tend not to be able to see beyond the short-term pain to understand the long-term benefits. But if you exercise every day, you are healthier in the long-term.

This speech by Bill Poole, one of the 12 regional Fed Board Presidents, is kind of boring to read through. But it explains the gap between people who can see the whole picture and the the lack of knowledge that leads to the public often supporting bad policy ideas when it comes to open markets.

http://stlouisfed.org/news/speeches/2004/06_15_04.html

 

Stoney, I am sorry you consider me condescending. It's not my intention. I am not going to post my resume, but I have a clue about what I am posting about. If you think that is wrong, feel free to post in response. You will get respect in return, not condescension.

I'm not "right wing" either. Not by a longshot. For one thing, trade and open markets are things that economists across the political spectrum agree on. It's because economists don't look at "winners" and "losers" in a vaccuum. They look at the total picture and the net effect of policies. And the net effect of open markets is that wages increase and the standard of living increases. This is not theory. You can do regression analysis, which involves complicated statistics that use computer models to account for about every factor that can have an impact--as hidden or remote as the factor might be--and it shows that when you look at all of the complex interactions between the forces at play, in the long-term, open markets make countries more prosperous. Survey every economist in the country--the people who are trained to understand how markets work and have the education--and 95 percent of them will state something similar to what I am stating. They are not "right wingers." They are just looking at a big picture that the public is not trained to look at or understand. If you have any doubts about what I am saying, please at least read that link to Bill Poole I posted. It drones on, but he talks about how protectionist policies will always benefit one small group of people, but have far-reaching effects that hurt other industries and groups of peoples, and on net, those policies without fail leave us worse off. This is backed up by all the evidence anyone could ask for.

If you consider what I typed above right wing or condescending, I am sorry. I am not sure how I else I can present myself to your liking. I am not trying to talk down to you, though. I am trying to talk to you.