Morning Ed: Brexit II {2016.07.03.Su}

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Will Truman

Will Truman is the Editor-in-Chief of Ordinary Times. He is also on Twitter.

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  1. Avatar LeeEsq
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    says:

    Linker and Levin: I agree with them, the Progressive reaction to Brexit has been weird. This includes the wonky, pro-market and globalization types like the Vox and Slate crews and the more anti-capitalist types that inhibit LGM. Linker gets it kind of right, that the basic goal of progressivism as the cosmopolitan world but he misses a big inconsistency. Progressives are very capable of getting emotionally upset about destroyed local communities as long as it’s the right community, somebody in the in-group. Thats why many of them protest gentrification of cities or how global capitalism is treating developing countries. When it comes to groups that they don’t care about, its cosmopolitanism all the way.

    Going off on a tangent, and I’ve mentioned this before in the Siege of London thread, but many people are trying to have their cake and eat it to in the globalized age. You have progressives who think you can have the free movement of people without global capitalism and people on the right who think that you can have global capitalism without massive immigration. You really can’t have one without the other. You can’t protect some communities from cosmopolitanism but expose the ones you don’t care for.Report

    • Avatar InMD in reply to LeeEsq
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      says:

      The reaction is what happens when a movement that claims to eschew values in the traditional sense suddenly realizes that not everyone shares theirs.Report

      • Avatar LeeEsq in reply to InMD
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        says:

        To be fair to progressives, most ideologies claiming some form of universality are based on some level that deep down everybody wants the same thing or that everybody who disagrees is deeply wrong. You find this in progressivism, conservatism, libertarianism, anarchism, Marxism, Christianity, Islam, pacifism, feminism, etc.

        It really doesn’t matter either the ideology in question is beneficial or malignant, correct or incorrect. There are seven billion people in the world and almost as many ways as seeing the world and how it should be. There is never going to be consensus.Report

  2. Avatar Doctor Jay
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    says:

    One of the things I observe in many on the left is a sort of assumption that their values will prevail because they are self-evidently better. But I am of the opinion that they need to be sold on it. Truth needs a champion. I think this means I agree with Linker.Report

    • Avatar LeeEsq in reply to Doctor Jay
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      says:

      This sort thinking exists among all ideologies. It might be more common on the Left because how they see the history thanks to Marx, the inevitable revolution, but it isn’t unheard of among conservatives either. See Fukuyama’s End of History Thesis, he thought that liberal democracy and free market capitalism were so evidently superior to anything else at the end of the Cold War that there is really nothing to discuss. Yet, anti-capitalists still exist and sometimes even gain political power, Chavez in Venezuela, and there are many illiberal people across the world.Report

      • Avatar Don Zeko in reply to LeeEsq
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        says:

        It’s a bit much to blame this outlook on Marx. There are many, many ways in which the present can be described as the most [X] in human history, with dramatic changes in the past couple centuries that are quite amenable to the basic paradigm of liberal democracy.Report

        • Avatar Doctor Jay in reply to Don Zeko
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          says:

          One can certainly dispute whether it’s because of Marx, but he definitely displayed this attitude. I think he got it from Hegel, in fact. Which is why Marx is “dialectical materialism”, the dialectical bit coming from Hegel.Report

    • Avatar Saul Degraw in reply to Doctor Jay
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      says:

      I don’t think this is unique to the left. I think it is common among all ideologies and all true believers. Once someone has a bill of goods that they really believe, they are gobsmacked that people don’t want what you are selling.

      I think you can say the same thing about Evangelical Christians or Libertarians.Report

      • Avatar Dark Matter in reply to Saul Degraw
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        says:

        Free trade isn’t intuitively obvious as a good thing, especially to the people who are hurt by it, yet free trade being a good thing is to economics what the Theory of Gravity is to Physics.

        There are lots of examples of that. If I *want* something to happen then it *must* be a good thing for the government to make it happen. This is how we got Prohibition, the drug war, the massive amount of redistribution of money we have, etc.

        Hidden costs can be just that, hidden.Report

        • Avatar LeeEsq in reply to Dark Matter
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          says:

          Many believers in free trade see it as an intuitively obvious good thing. I think the real big blind spot with many libertarians is how the perceive government and the state. A lot of them see government and the state as so inherently evil that they don’t see to quite understand why many people, especially persecuted disadvantaged groups, aren’t more interested in smashing the state and joining the free market paradise. They really seem to struggle with why many people are wary of the market and trust government more.

          Its not perfect but many people see that their vote in elections, ability to protest, and other democratic actions give them more leverage over government than their consumer power does over businesses. Trying to get a business to change a labor practice you find unethical like child labor or blood diamonds by consumer action alone is not easy. Many other consumers either don’t care or the market makes it more profitable to continue a variety of exploitative practices even in the face of decently sized consumer protest.Report

        • Avatar dexter in reply to Dark Matter
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          says:

          @dark-matter, Please explain to me why sending about thirty billion a month to a to totalitarian regime with no worker’s rights and an environmental policy that allows carcinogenic particles to get so thick that visibility is down to a few blocks is a good thing.
          Also, please convince me that China has no trade barriers to our goods.
          Also, convince me that Mexico is doing better since NAFTA.Report

          • Avatar Dark Matter in reply to dexter
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            says:

            Dark Matter: free trade being a good thing is to economics what the Theory of Gravity is to Physics.

            Opinion of economists[edit]
            The literature analysing the economics of free trade is extremely rich with extensive work having been done on the theoretical and empirical effects. Though it creates winners and losers, the broad consensus among economists is that free trade is a large and unambiguous net gain for society.[6][7] In a 2006 survey of American economists (83 responders), “87.5% agree that the U.S. should eliminate remaining tariffs and other barriers to trade” and “90.1% disagree with the suggestion that the U.S. should restrict employers from outsourcing work to foreign countries.”[8]
            Quoting Harvard economics professor N. Gregory Mankiw, “Few propositions command as much consensus among professional economists as that open world trade increases economic growth and raises living standards.”[9] In a survey of leading economists, none disagreed with the notion that “freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment.”

            https://en.wikipedia.org/wiki/Free_trade#Opinion_of_economists

            dexter: convince me that China has no trade barriers to our goods.

            The weird part about trade barriers and other forms of protectionism is it primarily hurts the country that’s using them. Not the country which is subject to them. As wiki puts it: Protectionism is frequently criticized by economists as harming the people it is meant to help. …Protectionism results in deadweight loss; this loss to overall welfare gives no-one any benefit… the benefits of free trade outweigh the losses by as much as 100 to 1.[17]

            dexter: Please explain to me why sending about thirty billion a month to a totalitarian regime with no worker’s rights and an environmental policy that allows carcinogenic particles to get so thick that visibility is down to a few blocks is a good thing.

            It’s clearly better for our economy than not trading (see above quote and link). As for them, let’s reverse that statement. Can you claim they’d be better off without jobs? Can you claim they’d (or we’d) be better off if they followed North Korea’s trade policies? North Korea’s other policies?

            China exists. We very much want them getting rich (and making us rich) via trade as opposed to the alternatives.

            [Chairman] Mao’s exact words were: “I’m not afraid of nuclear war. There are 2.7 billion people in the world; it doesn’t matter if some are killed. China has a population of 600 million; even if half of them are killed, there are still 300 million people left. I’m not afraid of anyone.” http://claudearpi.blogspot.com/2013/03/mao-and-atom-bomb.htmlReport

            • Avatar Chip Daniels in reply to Dark Matter
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              says:

              and in the long run these gains are much larger than any effects on employment.”

              Uh, how long is that run going to take, exactly?Report

              • Avatar Dark Matter in reply to Chip Daniels
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                says:

                Chip Daniels: Uh, how long is that run going to take, exactly?

                For the country? Probably very quickly.

                For you personally? That could be ‘never’.

                That’s the nasty political problem. Say Walmart starts buying clothing from China and textiles in the US disappear overnight. The country, as a whole, is not only better off but much better off because there are far more consumers than there are textile workers. Multiplier effects suggest putting extra money in every household results in extra spending which creates more jobs than are lost. However those new jobs don’t know they’re due to Chinese textiles.

                But you a textile worker know exactly who you are, that you lost your job, and that it’s not coming back. Worse, your replacement job may be worse than what you did, so this may suck for you for life. You’ll vote based on this, the 100 people who benefited will not.

                Having said that, Free Trade tends to be a scapegoat for other problems which have painful political solutions. The gov gets in the way of employment doing things people want, explaining that is a problem, so blame something else.Report

              • Avatar Chip Daniels in reply to Dark Matter
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                says:

                On my side of the political aisle, we call that “false consciousness”.

                The American people are much better off, they just have a false consciousness, an inability to see how really successful free trade is. If their eyes were open, they would rejoice at the blessings of free trade being bestowed upon them.

                Seriously, this is just the “cheap I-phones and tee shirts” argument.Report

              • Avatar notme in reply to Chip Daniels
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                says:

                By your buddy marx?Report

              • Avatar dexter in reply to Chip Daniels
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                @chip-daniels, You gotta love true believers. Did you know that the earth is only 6,000 years old. God made the rocks look really old to test our faith. Now prove that is not true.
                Also, I saw a graph in college that said Mao would kill us all if working class Americans didn’t send all our money to the one percenters and the Chinese pseudo capitalists.Report

              • Avatar Brandon Berg in reply to dexter
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                says:

                Also, I saw a graph in college that said Mao would kill us all if working class Americans didn’t send all our money to the one percenters and the Chinese pseudo capitalists.

                Yeah, I’m going to have to call BS on this one. This can partially be explained by the fact that you don’t understand the distinction between taking less money from someone and giving them free money, but even then it’s a bit of a stretch to believe.Report

              • Avatar dexter in reply to Brandon Berg
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                says:

                @brandon-berg, You don’t understand sarcasm. I found using the fear of Mao bombing us as one of the reasons America moved so many of the blue collar jobs to China to be fall out of my chair, with tears running down my cheeks funny. I am an old guy who remembers Khrushchev pounding his shoe on a table at the UN threatening to bury us all. All I have to say about that is wouldn’t be a shame if China was a crippled as Russia and had to free their recent conquests? Tibet would certainly be happy.

                As for not understanding people getting free things I think I have a handle on that. I am going to take a giant leap and assume you are talking about the banks committing fraud by selling worthless commodities and paying pennies on the dollars in fines and doing no jail time and then getting billions of dollars so they could continue to give huge bonuses. I am going to assume you are talking about the big corps in Louisiana that receive more in tax breaks than they pay in taxes. I am going to assume you are talking about companies that receive tax breaks for moving to China. I am going to assume you are talking about hedge fund people who buy a senator and receive very generous tax breaks. I am going to assume you are talking about billionaire sports club owner getting free stadiums and very generous tax breaks. In case you missed it again, I will tell you that the above paragraph was sarcasm.
                Your Randian ideal says that if you aren’t born with a high iq and parents or guardians that know the right people who can help them get through tough times that is too fishing bad, but you don’t care.
                My philosophy says that sometimes the needs of the many out weigh the wants of the few. It would not bother me a drop if taxes on the upper classes was raised enough to at least fix our infrastructure.
                Finally, one last question: If free trade is so marvelous, why is life expectancy for white males in the US dropping?Report

              • Avatar DensityDuck in reply to dexter
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                says:

                “My philosophy says that sometimes the needs of the many out weigh the wants of the few.”

                Who are the few, and who are the many?

                What are the needs, and what are the wants?Report

              • Avatar dexter in reply to DensityDuck
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                says:

                @densityduck , I am not sure why you are pretending to be obtuse but I will answer your question with no snark.
                The few are the five percenters and they want it all. Just one subset of the many are the homeless vets and they need a place out of the rain.Report

              • Avatar Dark Matter in reply to Chip Daniels
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                says:

                Chip Daniels:
                On my side of the political aisle, we call that “false consciousness”.

                “false consciousness”: (especially in Marxist theory) a way of thinking that prevents a person from perceiving the true nature of their social or economic situation. (source: google)

                Chip Daniels:
                The American people are much better off, they just have a false consciousness, an inability to see how really successful free trade is. If their eyes were open, they would rejoice at the blessings of free trade being bestowed upon them.

                Unfortunately, the true ‘opening of their eyes’ would involve taking 2nd(?) year econ and multiple hours of studying math and graphs. IMHO it’s not *hard* (:cough: although I like math and graphs) but it takes a while.

                Chip Daniels:
                Seriously, this is just the “cheap I-phones and tee shirts” argument.

                If you have a way to disprove free-trade-being-silly-good-for-the-economy, then I’ve got a Nobel Prize for you. I’m quite serious, you’d be undoing hundreds of years of economic study involving hundreds of countries and millions of examples.

                And Stillwater pointed out I didn’t source my original statement regarding free trade being the scientific consensus, so here is a link. https://en.wikipedia.org/wiki/Free_trade#Opinion_of_economistsReport

              • Avatar Brandon Berg in reply to Dark Matter
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                says:

                The IGM panels are also a good source for getting a feel for expert consensus on economic issues.Report

              • Avatar Chip Daniels in reply to Dark Matter
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                says:

                @dark-matter
                Asserting that “Free Trade” is somehow an unassailable proven fact like gravity is turning open ended science into a creedal faith.

                Is it possible that what economists predicted would happen under these series of trade agreements, did not turn out the way they thought?

                Is it possible that the economist profession got things wrong, and should re-assess their prescriptions?

                Is it also possible that “free trade” is not a single magic prescription, but in fact has many different variations, some of which are beneficial, others destructive?

                “Free Trade” is not a single entity at all; The term “Free Trade” refers to not a single principle defined by David Ricardo, but a series of international treaties and agreements like TPP, GATT, NAFTA and so on.

                These agreements are hundreds, thousands of pages long, and contain thousands of different clauses, stipulations, and reciprocal binding actions that were negotiated and revised and altered many times, tilting the balance of power and risk this way or that.

                Yet, would you assert that they all constituted Ricardian “Free Trade”?

                As I mentioned upthread, these agreements could just as easily have instituted a global minimum wage, or an international agreement on environmental protection and workplace safety; Would we still be referring to them as “Free Trade”?
                Why not?Report

              • Avatar Dark Matter in reply to Chip Daniels
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                says:

                Chip Daniels:
                @Dark Matter
                Asserting that “Free Trade” is somehow an unassailable proven fact like gravity is turning open ended science into a creedal faith.

                :Amusement: The Theory of Gravity is Wrong, there are observable phenomenon which it doesn’t get right (Spin of the Galaxy, etc). That’s why we have ‘Dark Matter’. Gravity is, imho, the weakest of all the grand theories (because we know it’s wrong), some time in the next 50 years it will (hopefully) get a makeover and Nobel prizes will be handed out.

                So yes, I agree, science should never be a ‘faith’. However all disagreements with the grand theories are not equally valid, and it’s certainly not an excuse to jump out a window (or throw the economy out the window). Notice that Gravity’s wiki has a “Anomalies_and_discrepancies” section, also notice that Free Trade’s does not.

                From a theory standpoint, Free Trade is stronger than Gravity. Unlike with Gravity, none of these disputes have risen to the level of questioning/overturning the main theory, and I don’t see mainstream work which suggests anything is coming. I’ve been hearing complains about how awful trade is for decades, and yet the econ community marches on with their consensus. Good links btw (although the 3rd didn’t resolve). A good summation of the rise and fall of the economists whose work you’re linking to is here: http://www.cfr.org/trade/dont-cry-free-trade/p14526

                This country has serious economic problems, imho most of them stem from statist issues and not from Trade, adopting the trade policies of North Korea imho isn’t a good idea. Further it’s important to ask “what is the alternative, and is its record better”.

                Chip Daniels:
                @Dark Matter
                “Free Trade” is not a single entity at all; The term “Free Trade” refers to not a single principle defined by David Ricardo, but a series of international treaties and agreements like TPP, GATT, NAFTA and so on.

                This is confusing ‘Free Trade’ the concept with the implementation in it’s name, and I’ve already said I’d just tear up the existing agreements and go whole hog.

                Chip Daniels:
                @Dark Matter
                Yet, would you assert that they all constituted Ricardian “Free Trade”?

                It’s important not to let the perfect be the enemy of the good with these sorts of things. My hope is it, although imperfectly, moves the needle. It helps a lot that the complaints I hear are from people who disagree with the concept of trade and not the econ community.Report

              • Avatar Mike Schilling in reply to Dark Matter
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                says:

                Notice that Gravity’s wiki has a “Anomalies_and_discrepancies” section, also notice that Free Trade’s does not.

                Nor does the wiki article about the Trinity. Having something asserted to be true in all particulars does not make it *more* scientific.Report

              • Avatar Chip Daniels in reply to Dark Matter
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                says:

                @dark-matter

                This is confusing ‘Free Trade’ the concept with the implementation in it’s name,

                Well, yes, in the same way that it would be an error to confuse ‘Socialism’ the concept with the implementation in its name.Report

              • Avatar Dark Matter in reply to Chip Daniels
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                says:

                Chip Daniels: Well, yes, in the same way that it would be an error to confuse ‘Socialism’ the concept with the implementation in its name.

                OK, I’ll bite. Define ‘Socialism’ and how it should be implemented?Report

              • Avatar Chip Daniels in reply to Dark Matter
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                says:

                That’s my point!

                Socialism is not a prescription that can be followed, it is a general principle that asserts a good outcome if property is brought under state control.

                The implementation can be as minor as public schools, or as total as North Korea, and still be called (by some) as “socialism”.

                So it is a useless endeavor to argue about something so nebulous. General principles have no data to collect, no yardsticks to measure, no way to be falsified.

                Its all a No True Scotsman game, where a bad outcome is either too much of the principle, or not enough, and no way to determine which.

                Instead, it is useful to argue if whatever-its-called in the Soviet Union was beneficial, or whether Dade County’s school system is effective and just.
                These are things that have empirical existence, data that can be collected and measured.

                We can certainly agree that Ricardian free trade in general principle is a good thing; but that doesn’t tell us anything about whether NAFTA has yielded a good or bad outcome.Report

              • Avatar Brandon Berg in reply to Chip Daniels
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                Isn’t it funny how cell phones so important that they’re a basic human right when we’re talking about whether the government should subsidize them for the poor, and yet still so unimportant as to be a total fishing joke when we’re talking about the benefits of free trade?

                Lack of affordable clothes used to be a real problem for the poor. It’s easy enough for upper-middle-class bougies like us to treat cheap consumer goods as of no real consequence, but it’s a major quality of life improvement for those less well off. And of course, it doesn’t stop at shirts and phones, but extends to all tradeable goods.

                Not to mention Chinese workers, whose incomes have increased severalfold in the last generation or two. But they’re just Chinese, so whatever.Report

              • Avatar Chip Daniels in reply to Brandon Berg
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                Would you be better off, or worse off, if the cost of cell phones doubled, but you had a defined benefit pension plan and spent only 25% of your income on rent?

                Would you be better off or worse, if the cost of tee shirts doubled, but you could attend college tuition free?

                And get a job immediately after that allowed you to buy a house on the strength of one income?Report

              • Avatar notme in reply to Chip Daniels
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                Clearly we’d be better off if liberals declared everything to be human right and the govt paid for it.Report

              • Avatar Chip Daniels in reply to notme
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                For military veterans in the 50’s and 60’s, purchasing a home for a $1.00 down payment and below market interest rate , and attending college tuition-free was in fact paid for by the government via the VA and GI Bill of…wait for it…Rights.

                Yes, clearly we should make America that great again.Report

              • Avatar Brandon Berg in reply to Chip Daniels
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                says:

                Would you be better off, or worse, if the cost of clothing increased a thousandfold, but you could get 2% off college tuition?

                You’re just making stuff up. You can make any trade-off look as good or as bad as you want to if you’re just pulling the exchange rate out of your ass.

                And that particular trade-off doesn’t even make sense qualitatively. There’s no logical connection between tariffs on T-shirts and subsidies for college. I guess you could use the tariff revenues to subsidize college, but domestic government spending is way, way up since the 70s, so it’s more an issue of priorities and enrollment than revenue.Report

              • Avatar Chip Daniels in reply to Brandon Berg
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                Tuition-free college, defined benefit pensions, single income homeowners…these things actually happened, and were commonplace prior to “Free Trade”.

                The acid test of politics is that question-

                “On balance, are we better off or worse off”?

                The advocates of the trade treaties keep insisting that things are so much better off, that “we” are so much wealthier, that we stand at the apex of civilization, that we would be the envy of Louis XIV because the Sun King could never buy a tee shirt for so little.

                Yet, in the very next breath, vehemently insist that “we” are so broke, so impoverished, that tuition-free college is an impossibility.

                It is also insisted, that global trade is a zero-sum game, that while Americans are seeing their stable jobs disappear, not to worry, Malaysians are doing just fine, thankyouverymuch.

                The underlying assumption is that widespread prosperity, financial security and a stable middle class are an impossible in addition to cheap phones and tee shirts- we must, absolutely must, choose one or the other.

                Its that same false dilemma we were fed about environmental regulations worker safety regulations – we could have jobs or smog restrictions, jobs or saw guards.

                If globalism is so wonderful for everyone, why don’t we invite the actual participants to weigh in?

                Suppose Ohio steelworkers and Chinese steelworkers were to negotiate a treaty?

                What if the Foxconn assembly line workers, and Mexican maquiladora workers, were to set the terms and conditions of global trade?

                What if Bangladeshi parents were told that there is enough wealth in the world that they could send their children to school AND the parents could still have jobs?

                What if the people who actually work for a living were allowed to give their verdict on NAFTA, GATT and TPP?Report

              • Avatar Dark Matter in reply to Chip Daniels
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                says:

                Chip Daniels:
                Tuition-free college… actually happened, and were commonplace prior to “Free Trade”.

                We don’t have Tuition-free college because it’s something like 10x as expensive as it was in 1950.
                If it were as cheap as it used to be, current state funding would just handwave everyone in.

                So… is Free Trade is why College Tuition has increased by absurd multiples? (Personally I’d say it has a lot to do with these massive bureaucracies Colleges have created, they have to be paid for somehow).

                And as long as we’re using “Post hoc ergo propter hoc” reasoning (after this, therefore because of this)..
                …was Free Trade Responsible for the Moon Launch? The civil rights movement?

                https://en.wikipedia.org/wiki/Post_hoc_ergo_propter_hocReport

              • Avatar Stillwater in reply to Chip Daniels
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                The underlying assumption is that widespread prosperity, financial security and a stable middle class are an impossible in addition to cheap phones and tee shirts- we must, absolutely must, choose one or the other.

                I don’t think it’s a false dilemma in terms of outcomes, Chip, but rather in terms of principles. Acceptance of free trade ideologically commits adherents to a belief that the best possible economic outcome – socially if not individually, of course – is determined by choices made by rational actors in an open, fully-functioning, competitive market. So by definition, those folks will be opposed to state subsidized education.

                On the other hand, a person who values state sponsored education might be so unprincipled that they ALSO believe in a free market determining tee-shirt prices within a wide spectrum of options. Which is so fucking loose, man…Report

              • Avatar DavidTC in reply to Brandon Berg
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                says:

                @brandon-berg
                Lack of affordable clothes used to be a real problem for the poor. It’s easy enough for upper-middle-class bougies like us to treat cheap consumer goods as of no real consequence, but it’s a major quality of life improvement for those less well off. And of course, it doesn’t stop at shirts and phones, but extends to all tradeable goods.

                We could also solve the problem of lack of affordable clothes by removing minimum wage, child labor, and workplace safety laws, allowing clothing to be made cheaper.

                Would this be a good thing, or not?

                In fact, in many ways, it appears that actually *is* how we solved that problem…we just did it somewhere else, and then spend a lot of effort trying to shuffle things around so we don’t ‘know’ that.Report

              • Avatar Brandon Berg in reply to DavidTC
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                @davidtc
                Minimum wage, yes, absolutely. Child labor…probably not in the US, now. The US is wealthy enough, and child labor productivity low enough, that banning child labor is unlikely to have a significant negative effect, while it could probably prevent abuse by people in the left tail of the parenting skills distribution. In much poorer countries, it may still be the least bad alternative some families face.

                Safety regulations are a mixed bag. At best, they mitigate the effects of information asymmetries regarding the safety of working conditions. But they can also lower productivity and thus lead to lower pay and less investment, at worst pushing workers back to subsistence farming.

                The key thing to understand about safety regulations is that compliance costs come out of workers’ pay. Based on productivity, employers are willing to pay a certain amount for labor, and they don’t care whether they spend it on wages or compliance costs. If the regulation is one that fully-informed workers would choose, knowing what it would cost them and how much safer it would make them, it can be good. But it can also force workers to “purchase” more safety than they would prefer.

                Imposing US safety regulations on much poorer countries would almost certainly force a pay/safety mix with more safety and less pay than workers in those countries would prefer. Health and safety regulations are evaluated based on the concept of a value of a statistical life (VSL), which is calculated based on how much people are willing to spend on various things that make them safer, or how much of a pay premium they require to work in risky jobs. To be justified, a regulation’s cost per statistical life saved must be less than the estimated VSL. But VSL is much higher in rich countries than in poor countries, so a regulation that comfortably passes the VSL test in the US may fail it miserably in Indonesia.

                Anyway, all of this strikes me as concern trolling. Globalization has obviously been a huge win for workers in countries like China, India, Vietnam, and Malaysia, and imposing US labor standards on those countries as a condition of trade would have prevented a lot of those remarkable improvements in standard of living those countries have seen over the past 20-30 years.Report

              • Avatar Jaybird in reply to Brandon Berg
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                Why should I care more about the workers in countries like China, India, Vietnam, and Malaysia than about the workers in the US?Report

              • Avatar J_A in reply to Jaybird
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                says:

                1. Because they are people like you

                2. Because a reduction in inequality between societies helps reduce source of international conflictReport

              • Avatar Jaybird in reply to J_A
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                says:

                They seem to have a different culture than I do. Are you using the word “like” to refer to biology?

                I’m going to need #2 demonstrated because I don’t see it as obvious.Report

              • Avatar DavidTC in reply to Brandon Berg
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                says:

                @brandon-berg

                So here’s the fun question: If removing minimum wage in the US made clothing affordable, then…would clothing *actually* be affordable if people didn’t make the minimum wage?

                Or, to try from another direction: You mentioned productivity, which often an economic force. More goods being produced is a net good.

                But let’s actually analyse what happens when a factory moves overseas:

                Yes, Americans have cheaper clothing, but they also *make less*, on average. In fact, even if you average *everyone*’s salaries, Americans and people overseas, people make less! (The overseas factory is hardly going to be *more* expensive to operate.) The clothing might change from 2% of 99.99% of people’s salary to 1%, but it also changes from 2% to *infinite* percent of the salary of the laid-off people.

                See, here’s the problem: It is not more efficient to make clothing overseas. (Barring efficieny gains like ‘no safety regualtions’ and ‘no restroom breaks’ that we actually *dislike* on moral grounds.) It is not more productive to make clothing overseas. (It’s actually rather less productive.) We don’t get more clothing for less work, we get…exactly the same amount of clothing for exactly the same amount of work, except we then have to ship it overseas. There is *nothing* about it that provides any sort of net economic benefit by itself.

                It is cheaper solely because it can bid labor cheaper. That’s it. That’s the entire thing.

                And there are two claimed ‘net goods’ as a result: ‘Americans have cheaper stuff’ and ‘poor people in poor countries earn some money’.

                But the benefits to Americans are *completely pretend*…yes, a huge percentage of people are lucky and have a few dollars more, which can really make a difference to the poor…and the small fraction of laid-off people are *immensely worse off*. No net benefit, actually a net loss. It’s jsut *hard to see* unless you’re one of the unemployed…and it get *especially* hard to see after a few years, where people are not ‘unemployed due to the factory moving overseas’, they are just saying ‘there are mysteriously no jobs’.

                And to the second idea, that ‘poor people earn more money’, I have a couple of replies, several of them unprintable, but most of them are like ‘Wow, it’s amazing how global capital suddenly cares about poor people.’ and ‘Hey, wait a second, wouldn’t those communities actually be better off if factories were making stuff for *them*?’ and ‘Is this really a reasonable way to do economic aid to poor countries? Couldn’t we actually take the tax base we *used* to have and do, well, anything else?’Report

              • Avatar Dark Matter in reply to DavidTC
                Ignored
                says:

                DavidTC:
                @Brandon Berg
                So here’s the fun question: If removing minimum wage in the US made clothing affordable, then…would clothing *actually* be affordable if people didn’t make the minimum wage?

                Yes, absolutely. My teenagers’ minimum wage doesn’t have much impact on the family budget, and this is very typical for a minimum wage worker. http://www.heritage.org/research/reports/2013/02/who-earns-the-minimum-wage-suburban-teenagers-not-single-parents

                Further, my teenagers are seriously functional people. If a businessman is choosing between hiring a dysfunctional adult at a too high minimum wage and my teen, then that’s an easy choice; Which means no job for the person the min-wage is trying to ‘help’.

                Still further, when I was first starting out, I accepted a job that paid a lot less than I “deserved” (it was a dying company and all they could afford). The skills I learned there were marketable and I more than made up for it at the next job. Opportunity only knocks at work. I’d much rather dodge the question of ‘how much did you make at your last job’ than ‘what’s wrong with you to make you not be working’.

                DavidTC:
                @Brandon Berg
                But let’s actually analyse what happens when a factory moves overseas:
                Yes, Americans have cheaper clothing, but they also *make less*, on average. In fact, even if you average *everyone*’s salaries, Americans and people overseas, people make less! (The overseas factory is hardly going to be *more* expensive to operate.) The clothing might change from 2% of 99.99% of people’s salary to 1%, but it also changes from 2% to *infinite* percent of the salary of the laid-off people.

                Let’s take your numbers at face value because they don’t say what you think they do.

                How many jobs were destroyed? A thousand? Let’s say 20 Thousand (200 factories of 100 people each).
                Assuming $50,000 per worker, that’s a loss to society of $1 Billion.

                Average spent on clothing: $1,700 per household, or 2.8% (google)
                Number of Households in the US: 134 million (google)
                Total Amount of Savings: 114 Billion (1.7k x 134 million cut in half).

                Now, that 114 Billion in extra income to households will go on to create more jobs (so the effect is greater), and a lot of those displaced workers will find other employment (so the effect is a lot less, my job has been destroyed at least 3 times so far).

                And the politics of this is terrible. Some of those workers will suffer serious economic injury, and they know it. $850 per household is low enough they may not notice, the millions of jobs created by multiplier effects from that 114 Billion seriously won’t know it. Worse (politically) everyone who is fired (in general, not from trade) may get the idea that their job has been eliminated because of trade. Economic forces inside the country have greater impact than trade does, but trade is at least an answer.

                It’s easy to point to the closed factories and say there was no benefit, that’s also completely wrong.Report

              • Avatar DavidTC in reply to Dark Matter
                Ignored
                says:

                A thousand? Let’s say 20 Thousand (200 factories of 100 people each).
                Assuming $50,000 per worker, that’s a loss to society of $1 Billion.

                That’s way low.

                ‘Employment in the apparel manufacturing industry has declined by more than 80 percent (from about 900,000 to 150,000 jobs) over the past two decades. The decline has been proportional throughout the apparel manufacturing component industries’
                http://www.bls.gov/spotlight/2012/fashion/pdf/fashion_bls_spotlight.pdf

                That’s 750,000 jobs. And, of course, from 1992 to 2012, the US population added 25%, who also presumably need clothes, so really, there should have been about 1,100,000 apparel jobs in 2012, not 900,000.

                So 950,000 jobs are missing. (Pretending it’s 2012…there are probably more now.)

                That’s 47 billion dollars in lost income

                Now, that 114 Billion in extra income to households will go on to create more jobs (so the effect is greater), and a lot of those displaced workers will find other employment (so the effect is a lot less, my job has been destroyed at least 3 times so far).

                First, while *those* displaced workers might find jobs, that, obviously displaces *other* workers. If there were 100,000 people out of work before, and 20,000 jobs are removed from that area, there will be 120,000 people out of work, even if the unemployed people are not actually the people whose jobs were removed.

                Secondly, the cost of clothing has not actually halved. The cost a few, specific, really cheap things has halved. The extremely poor can now wear new clothing instead of secondhand.

                Third, the amount of money spent on clothing was not halved either. A good deal of the savings has resulted in them just buying *more clothing*. (Or, if poor, new clothing, as I just said.) The American people spent $1644 on clothing in 1994, and $1786 in 2014 per household. Or, to adjust for inflation, $2626 in 1994, and $1786 in 2014. That’s an decrease of 30%. (And, yes, the spending on clothing does presumably slightly increase the amount of jobs in the clothing retail market, but it mostly create jobs overseas, right next to the *rest* of the apparel manufacturing industry.)

                Now, despite all this, you somehow got the correct amount per household (?) Roughly $112 billion extra dollars. But before we play the game of calculating what that did, let us first subtract the $47 billion we lost.

                So $65 billion extra dollars a year. Will that create enough jobs to cover almost a million people of work?

                Or, to put it another way, can $65,000 extra a year generally sloshing around the economy cause one one person to get a $50,000 a year job?

                When it is put that way, the answer is pretty clearly: No, it cannot. That idea is absurd.

                Let’s try to build a specific hypothetical (Despite this being generalized across the entire economy.): Let’s say that a group of people took that extra money, and, came to a local business and bought some additional things for a total of $67,000, causing enough additional work that the business thinks it would be nice to hire someone. But *is* that enough to hire someone?

                Let’s not forget taxes. The business is only keeping ~93% of that $65,000 or so, the rest was to cover the sales tax, so the business only has ~$60,000 it can spend on someone. And if the person is getting paid $50,000, that, *at minumum* costs the employer $53,000, thanks to their 6.2% FICA duty…and presumably there’s some sort of training, and other additional expenses.

                And the obvious problem is…no business can can spend $53,000 on an employee that takes in $60,000 a year at the cash register, because of the obvious fact they have to *buy* what they sell, and that’s presumably not with a 85% markup! The stuff being sold doesn’t appear out of nowhere.

                The 2009 Stimulus bears this out…it cost about $280,000 per job created, which sounds right to me. $280,000 in the economy might make one job. And a lot of that was specifically targeted things that created jobs, not ‘hope everyone takes their extra clothing money and spend it on other things’

                That $112 billion is maybe 400,000 added jobs.

                And the ‘multipler’ thing is…multiplers are for the *economy*. Putting X dollars in the economy might, indeed, create 2X more economic output. But that doesn’t do a damn thing for people who *don’t have jobs*. To get jobs created, you have to put several times that job’s salary in the economy.

                To make an absurd analogy: If space aliens came down tomorrow and gave everyone magical boxes that, when a button is pushed on the top, it built a house for them…yes, the economy would be more productive. Yes, less people would be without houses.

                But there would *still be less jobs*. The economy is not some sort of vague thing where all indicators point in the same direction. It is entirely possible for things to be good for ‘the economy’ in general and yet result in unemployment. It is even entirely possible for things to be good for the economy and yet bad for the *median* American.

                Like, for example, offshoring. Or anything else that puts ‘money in the economy’ at the expense of people able to actually work to *access* that money.Report

              • Avatar Dark Matter in reply to DavidTC
                Ignored
                says:

                DavidTC: That’s way low.

                My point was your made up numbers were massively in favor of trade-being-good and you were underestimating how ‘good’ things were by multiple orders of magnitude. You were claiming that closing *one* factory (not 200) clearly wasn’t worth the cost even if it gave 1% of household income to everyone in America.

                DavidTC: First, while *those* displaced workers might find jobs, that, obviously displaces *other* workers.

                Ah, no. Serious problem, the amount of work in the economy isn’t fixed. The number of jobs isn’t fixed. Starting one small business or making a new product doesn’t auto-magically eliminate another. If you notice your neighborhood doesn’t have a lawn mowing service and you start one, then not only are you creating jobs but the people paying you may actually be making more money if they’re working more hours because of the time you’ve freed up for them. This is especially true for Free Trade (FT) because (for the simplest text book version) you’d have one country which used to produce X+Y shift to X while their trading partner does the reverse.

                This means potentially the loss to our economy is “zero”. In practice it will be more but just multiplying the number of people who lost their jobs by their income is a VAST overstatement. Some people who lose their jobs from FT will be damaged, others will actually be helped, in practice you divide the total lost by a factor to reflect how many people got jobs (or how good those jobs are). I don’t remember what that ratio actually is but I’ll handwave a “3”, for every 6 people fired, 3 completely recover, 2 get half the income they used to, and one is just screwed.

                Secondly, the cost of clothing has not actually halved. The cost a few, specific, really cheap things has halved. The extremely poor can now wear new clothing instead of secondhand.

                First, yes, this example does help the poor a lot more than the rich. Second, looking at this time frame is misleading because this is the tail end of long term trends. Looking at before trade started, imho, gives a better picture. The percentage of household income devoted to clothing went from 10% in 1960 (when we made everything) to 3.5% today (link for 10%, your own source agrees with 3.5% http://ww2.kqed.org/lowdown/2013/05/24/madeinamerica/ ). This means an increase in household income of 6.5%, not 1%, but there’s an element of cherry picking to this and I don’t feel like looking up all the other numbers which I assume would also change so I won’t.

                DavidTC: The 2009 Stimulus bears this out…

                Our example represents a Permanent increase to the economy, the Stim was a one off (and the Stim was inefficient for multiple reasons and even $280k was probably not even close to the full cost per job but whatever).

                DavidTC: it cost about $280,000 per job created, which sounds right to me.

                :Gack: :Choke: :Sputter: You really shouldn’t be using “the Stimulus” as a baseline for how job creation is supposed to work. Unemployment actually went up when we did it, it was *that* inefficient. The Stim was enough money to give EVERY unemployed person a check for $60k and let them try to start a small business. Alternatively we could have spent the money on infrastructure (which the gov isn’t bad at).

                Median per person income is something like $30k. Do you really think the private sector has/gives out $250k in (benefits + compliance costs + overhead)?

                At a handwave (see links) the cost to create a job is $50k (compliance, taxes, income, benefits).
                http://boss.blogs.nytimes.com/2009/07/06/how-much-does-it-cost-to-create-a-job-by-encouraging-entrepreneurship/
                http://www.oregonlive.com/business/index.ssf/2011/10/what_does_it_cost_to_create_a.html

                Math time (without changing timelines):

                Damage done by FT: $16 B
                Benefit: $112 billion
                Subtract one from the other and we have $96B. Use your multiplier and that’s $192B, or roughly 4 million jobs created.

                If we expand timelines then some of the numbers change but we’re looking at a much higher benefit (probably not 6.5x better but whatever). Something else to consider is when we’re measuring gravity and we get numbers which don’t match the scientific consensus then either we get a Nobel or we made a mistake somewhere.Report

              • Avatar DavidTC in reply to Dark Matter
                Ignored
                says:

                You were claiming that closing *one* factory (not 200) clearly wasn’t worth the cost even if it gave 1% of household income to everyone in America.

                Erm, it’s hypothetically possible to read it that way, but there’s as there’s no actual way that one factory could reduce the *average* cost of American’s clothing by any noticable amount, which was the *other* side side of my hypothetical, I don’t know how you can read it that way in good faith.

                And, in fact, you didn’t at the time, and you’re just now trying to read it that way because I pointed out that moving apparel manufacturing overseas has caused *much* more job losses than you estimated.

                Starting one small business or making a new product doesn’t auto-magically eliminate another. If you notice your neighborhood doesn’t have a lawn mowing service and you start one, then not only are you creating jobs but the people paying you may actually be making more money if they’re working more hours because of the time you’ve freed up for them.

                What the hell does that have to do with anything? People do, for no obvious reason, create jobs…which they can do *regardless*.

                You seem to be arguing that removing jobs auto-magically *creates* other jobs. There is no evidence of this. You didn’t even actually make an *argument* for it, you just used an example of someone creating a job, and had them do it when they were out of work. But, of course, they could have done it just as easy or easier when employed!

                If there were 50 people at a local clothing factory, and 50 unemployed people in the same town, for an unemployment rate of 50%, and one of those unemployed people decided to start mowing laws, now unemployment is a 49%. If one of the *employed* people started mowing lawns, unemployment is probably also 49%, because that person just left a position that someone else will be hired to fill.

                If all those jobs move overseas, unemployement is now at 100%…and if one person starts a lawn mowing business, unemployment is now at 99%, regardless of where that person was previously employed.

                Your argument is literally claiming that unemployment makes some extra employment (?!), and seems to have a rather dubious grasp on how the labor market works. Specifically, in the real world, *new* jobs are much more likely to be created by *employed* people, because employed people have money and resources to *risk* things like that. Unemployed people cannot buy lawnmowers or send out advertising. (I mean, seriously, you literally posted a link to an article talking about how people need $15,000 in savings to start a business. People who just got fired from their jobs probably do not have $15,000 in savings!)

                Some people who lose their jobs from FT will be damaged, others will actually be helped, in practice you divide the total lost by a factor to reflect how many people got jobs (or how good those jobs are)

                Economics says that, if people not having their current job would have helped them in any sort of average, then they would have, tada, quit their job. If there was something better for them to be doing, *they would already be doing it*. At least, the vast majority of them would.

                Yes, there are a few *specific* counter-examples, but you can’t run around basing macro-economic analysis of the entire economy on a hypothetical ‘Well, maybe they’d buy winning a lottery ticket’ or ‘Maybe they’d start their own company’ nonsense. And, it’s worth pointing out, this could literally justify *anything*, economically. Why don’t we burn down their houses so the construction industry can hire them!

                You’re basically trying to apply the broken windows fallacy applies to labor, that labor is somehow better off because a specific job is removed from them.

                99.99% of people working in an apperal factory are working there because they see that option as *the best option currently on the table* for them…and they’re almost certainly correct.

                Remove that option, and they take a *worse* option. It might, indeed, be another job, if they’re lucky…but now you’ve removed *that* option from someone else, etc, etc, sliding every person one rung down the employment ladder until one additional person is unemployed.

                (And, *sigh*. Once again I, a liberal, find myself arguing from the *wrong direction* against a conservative that doesn’t understand basic market principles. Aren’t *I* supposed to be the guy arguing ‘People sometimes do not behave rationally, and the government shouldn’t assume they always know their best interests?’. Instead, I’m having to explain ‘People generally have the best job they think they can get.’.)

                The percentage of household income devoted to clothing went from 10% in 1960 (when we made everything) to 3.5% today (link for 10%, your own source agrees with 3.5% http://ww2.kqed.org/lowdown/2013/05/24/madeinamerica/ ). This means an increase in household income of 6.5%, not 1%

                If you think we were offshoring a large portion of apparel manufactoring before the early 80s, I don’t know why.

                The decrease in cost before that point came from *efficiency* gains. We had more productivity.

                Which costs jobs, yes, but actually *does* counter that in the economy, in the way you’re pretending that offshoring does.

                Doing things at the same level of quality for less time and effort *is* good for the economy as a whole.

                Doing things at the same level of quality, for the same time and effort, but for *less labor costs*, is not good for the economy as a whole, it is is, in fact, *exactly* neutral for the economy as a whole.

                Exactly neutral on ‘average’…with losses accruing to labor, and gains accruing to owners. Same amount of goods for everyone, except that corporate owners made more money from their sale and manufacture…and labor made less.

                And offshoring adds the fun twist of offshoring is the money still going to labor is now going to extremely poor labor in a mostly separate economy, so it isn’t even really ‘neutral’…that money tends to disappear over there. (Yes, the actual *money* comes back, but the *wealth* stays over there.)

                The Stim was enough money to give EVERY unemployed person a check for $60k and let them try to start a small business.

                Okay, you have wandered completely off the point, but I have to point out that, giving all unemployed people $60,000 to start a small business would, even pretending things were normal, result in half them back out of work at the end of 5 years…and I have to suggest that society launching *twenty times* as many small businesses as normally launch a year, would, uh, result in a lot more of them failing. Like, almost all of them. (And that’s ignoring the weird unfairness of just giving *unemployed* people money, and the fact they would not, in fact, use it to start businesses.)

                To get back to the point, you’ve gotten completely confused as to what we’re trying to figure out. The stimulus isn’t under discussion. We are discussing your claim that $X dollars in the economy resulted in $X/50,000 jobs paying $50,000.

                Please note there isn’t ‘how much *extra* money a business must have to hire someone’. We aren’t talking about that. We are talking about things being cheaper, aka, money now in the pockets of *people*, who will then attempt to buy extra things with it.

                Like I pointed out, something like 10-15% of that pocket money *instantly disappears* due to taxes before it can hypothetical make it to a new employee, via sales and payroll tax! Poof, gone.

                But even that’s a bit silly to worry about, considering that businesses tend to operate on profit margins of many 10%, so customers giving a business $50,000 means that business might now have *$5000* it can now spend on a new employee.

                A business doing an extra $50,000 in sales cannot *possibly* afford an extra employee of $50,000. That’s so silly I have no idea why I’m even discussing it.

                This is especially true for Free Trade (FT) because (for the simplest text book version) you’d have one country which used to produce X+Y shift to X while their trading partner does the reverse.

                No. That is how text books *justify* free trade, which is entirely true when different countries have mostly the same sort of economies and have an advantage in producing specific goods.

                If one country can produce something *with less resources*, (less time and/or effort) than another country, than *it* should make that, and other countries should make other things, and they should trade. That is all 100% true. As I said, increasing *efficiency* is good for the economy. I have no argument there.

                The problem is…this isn’t how offshoring works. Is is not more efficient to produce things overseas, in fact, it’s a generally less efficient…new factories have to be built, new workers have to be trained, source material and finished goods have to be shipped everywhere. There is *absolutely* no increased efficiency in having a t-shirt made in China than in the US. (This is partially a lie, in that some of that reduced efficiency is countered by not meeting *safety requirements*, adding efficiency. This…is hardly to anyone’s credit. Safety regulations are fact ‘a reduction in efficiency’ our society have decided, on a whole, it *likes*, and has mandated by law.)

                It’s just *cheaper labor*. That’s it. Cheaper labor. Doesn’t help the economy, as a whole, at all. Helps the people who make profits from those companies, hurts people who are employed by those companies.

                Seriously, think about this argument you’re making, and ignore offshoring for a second and pretend companies just started paying *American* workers much less?

                Are you actually arguing we’d be better off because we could buy stuff from those companies for less? If, like, tomorrow, everyone’s income was cut in half, and prices of everything were cut in half, that would be some huge boon to the economy? How do you think that possibly works? How does that help anything?

                Of course, ‘everyone’s’ income wasn’t cut in half, and prices of ‘everything’ also didn’t drop. It was a more randomized process, with some incomes dropping to zero, and price drops of random things. But it’s not some sort of economic *bettering*, it’s just a *shuffling*…and prices are stickier than new factory wages, so a lot of the money was shuffled into the pockets of the owners.

                But that’s just the problems if we pretend these are *American* workers, where it’s all ‘neutral’ to the economy. It’s just harmful to labor and beneficial to the owner class, but neutral in general. But it’s *not* American workers.

                We, as Americans, have a duty to keep Americans from dying on the streets, so all the out of work people *here* end up causing a drag on the economy, because we’ve got to cover their tax burden now, *and* help them out also. Whereas people in China who *were* out of work didn’t harm us at all…and the workers collecting paychecks in China don’t pay American income taxes on them…and mostly didn’t spend their wages on things over here either.Report

              • Avatar Dark Matter in reply to DavidTC
                Ignored
                says:

                DavidTC: Erm, it’s hypothetically possible to read it that way, but there’s as there’s no actual way that one factory could reduce the *average* cost of American’s clothing by any noticable amount, which was the *other* side side of my hypothetical, I don’t know how you can read it that way in good faith.

                I assumed you were making up all these numbers as you go and didn’t understand how big a 1% increase in household income was.

                DavidTC: Economics says that, if people not having their current job would have helped them in any sort of average, then they would have, tada, quit their job. If there was something better for them to be doing, *they would already be doing it*.

                Would you move across the country if someone offered you 5% more? If the answer is yes, then picture yourself married with children in high school. Getting fired and having no job is a huge shake up, and moving away from family/friends/church/school becomes a lot more reasonable in that context.

                DavidTC: 99.99% of people working in an apperal factory are working there because they see that option as *the best option currently on the table* for them…and they’re almost certainly correct.

                It’s probably more accurate to say working there is the least risky option, at least in the short term. Hopping to a new job entails risks, many of them impossible to evaluate. Of course *staying* also entails risks but most people don’t think that way, if the business has been stable the last few years then it will be stable forever… and the new job might be even worse.

                DavidTC: We are discussing your claim that $X dollars in the economy resulted in $X/50,000 jobs paying $50,000.

                Hardly. As I explained before, median personal income is $30k. Ergo I hand-waved the cost to create a job as $50k (those links I put out claim it’s less). Ergo if you add $50k to the economy you’re creating one, median job of $30k.

                Household income is $50k (ish), and sometimes it’s appropriate to use one and sometimes it’s appropriate to use the other. That 1% reduction in the cost of clothing was measured in household income.

                DavidTC: If one country can produce something *with less resources*, (less time and/or effort) than another country, than *it* should make that, and other countries should make other things, and they should trade. That is all 100% true.

                That’s intuitive, but no, this is a misunderstanding of how relative efficiency works and it’s wrong. Free Trade doesn’t depend on one country being more efficient than the other country, it depends on them having different relative efficiencies. It’s perfectly acceptable for one country to be worse at everything, as long as the ratios are different.

                Example:
                Two Countries, A & B. Both Countries have 10 units of production. There are two products X and Y.
                Each product trade for the other at equal value, both countries need a minimum of 3 units of each product.

                If both of them have the same relative production ratios, then there is no point in trading.
                Country A can use one unit of production to create one unit of Product X or one unit of Product Y.
                Country B can use one unit of production to create two units of Product X or two units of Product Y.

                Country A will produce 3 units of X and 3 of Y (and 4 of XorY).
                Country B will produce 3 units of X and 3 of Y (and 14 of XorY).

                Trade serves no purpose here. Total production of both countries will be 30 no matter what the product mix is.

                Example 2:
                Country A can use one unit of production to create one unit of Product X or one unit of Product Y.
                Country B can use one unit of production to create two units of Product X or three units of Product Y.

                Production is maximized if “A” only produces “X” and “B” only produces “Y” (even though Country “A” sucks at everything).

                A produces 10 units of X.
                B produces 30 units of Y.

                They trade 5 units so it ends up being
                A has 5X and 5Y
                B has 5X and 25Y.

                On a side note, there’s a lot of really counter-intuitive stuff in all this and it takes a semester or two for most people to get their head into it.

                DavidTC: …outsourcing…

                As far as I can tell, outsourcing is just another product.Report

              • Avatar DavidTC in reply to Dark Matter
                Ignored
                says:

                Getting fired and having no job is a huge shake up, and moving away from family/friends/church/school becomes a lot more reasonable in that context.

                Taking away someone’s job *does not benefit that person* in any sort of sense. You keep trying to *imagine* circumstances where it does, but the actual fact is, we are talking about *averages* here.

                You are functionally a person claiming that the poor play the lottery more often, so it’s better to be poor, because they’re more likely to win the lottery.

                You do not seem to understand how macro economics functions at all, that we don’t give a damn about outliers in it. Anything at all *might*, in theory, make *some* random person better off…the question is what does it do to the vast majority of people?

                Ergo I hand-waved the cost to create a job as $50k (those links I put out claim it’s less). Ergo if you add $50k to the economy you’re creating one, median job of $30k.

                As I pointed out, there is no possible way that makes sense, and it isn’t *slightly* what those links say.

                The first link is literally about someone starting a new business because they have $16,000…which *cheaper clothing* is extremely unlikely to result in.

                The second is how much it costs a *business* to create a job. But you realize that, for a business to have extra money to spend, we’re talking about *profits*, right? And you realize when people go a business and buy $50,000 worth of stuff, you understand the business did *not* make $50,000 in profits, right?

                Business, I repeat *once again*, generally have a profit margin under 10%, depending on the field. That means 90%+ of that $50,000 went into *purchasing inventory* and *rent* and *existing labor costs*, which means it can’t be used to *hire someone*. That $50,000, yes, continues on from there…with taxes reducing it the entire time, so the *next* cycle of business getting even less.

                This, incidentally, is where that *multiplier* you are talking about is, and why it’s, at most, *two*. Spending hits one business, a fraction of that hits the next business, and a smaller fraction hits the next, etc. Money get spent multiple times, until it peters out in taxes. (Smaller multipliers generally are because the first person didn’t spend all the money.)

                But that’s *total economic activity*, not ‘money to create jobs with’.

                That’s intuitive, but no, this is a misunderstanding of how relative efficiency works and it’s wrong. Free Trade doesn’t depend on one country being more efficient than the other country, it depends on them having different relative efficiencies.

                *sigh*

                I don’t actually *care* about relative efficiency, which has been this gigantic lie used to explain free trade. Yes, it does exist, but it is almost completely moot with *factory work*.

                Relative efficiency explains things like farming production, or rare minerals, or wind farms, or anything where geographic location can actually *alter* the efficiency. Factories, being enclosed buildings where things that are shipped in are turned into other things, *do not have relative efficiencies* based on location. Unless the factory is on the goddamn moon allowing heavier items to be moved easily, the actual location of a factory has no bearing at all on the efficiency of it. (Barring superficial crap like needing different levels of AC or whatever, or adding inefficiencies like safety regulations we’ve mandated *by law*.)

                There is nothing about China that makes it more *efficient* for t-shirt to be produced there. There is no magical quality of the Chinese people that makes them better factory workers. Now, China produces twice as much cotton as the US, which makes it sound like apparel might be a bit more efficient for China until you realize that the US produces more than enough cotton for its own clothing, and is in fact having to ship cotton to China to make clothing to ship back.

                It is, in fact, hugely *less* efficient (Not in the factory per se but in the entire process) to ship cotton halfway around the world, run it through a *newly built* factory as opposed to the factories we used to have the US, (often *very close* to the origin of the cotton), and then ship it back.

                This is because offshoring factories, 90% of the time, has *nothing to do* with relative efficiencies.

                It is entirely due to *labor* costs.

                On a side note, there’s a lot of really counter-intuitive stuff in all this and it takes a semester or two for most people to get their head into it.

                How long does it take for most people to actually learn what ‘efficiency’ is? Because ‘cheaper labor’…does not count as ‘efficiency’.

                Efficiency, in economics, is how much product you make using a specific amount of resources, tools, and labor. (That is, I feel I must point out for perhaps the hundredth time, the *amount* of labor, not the *cost* of labor.)

                A decrease in the cost of labor does not increase efficiency.Report

              • Avatar Dark Matter in reply to DavidTC
                Ignored
                says:

                DavidTC: Taking away someone’s job *does not benefit that person* in any sort of sense. You keep trying to *imagine* circumstances where it does, but the actual fact is, we are talking about *averages* here.

                Sure, agreed that the *average* person doesn’t benefit. But you’re trying to claim that they’re simply dead right there. That they never move on with their lives, that they never get another job, that if they do get a job it’s at the expense of someone else. That the damage is put-a-fork-in-them every-single-one-of-them is a 100% loss to society. In reality losing a job isn’t a death sentence.

                Which raises the question, how much does the *average* person suffer, which brings us back to my claim that the recovery ratio is 3, so the average person gets two thirds of their income back. Of course that’s mean, some get more, some get less.

                DavidTC: But that’s *total economic activity*, not ‘money to create jobs with’.

                Fine. We’ll do this a different way.

                GDP of the US: 16.7 Trillion.
                Number of Jobs: 151,097,000
                GDP/Job: $110,525

                Note this is a *serious* overstatement. This is mean, we want median, the Financial sector (etc) is going to be a serious distortion, so the amount of economic activity to justify a job will be a lot less. If we want to adjust for that… I’m not sure. The mean household income is 50% greater than the median which is suggestive but not conclusive. If we go with that then it’s $70-75k. So take a third off of my “jobs created” figure.

                DavidTC: I don’t actually *care* about relative efficiency, which has been this gigantic lie used to explain free trade.

                A conspiracy involving 10s of thousands of economists and hundreds of governments? Why for?

                DavidTC: Yes, it does exist, but it is almost completely moot with *factory work*.

                Weirdly I’ve had their conversation where people have claimed it only works with factory work.

                DavidTC: Factories, being enclosed buildings where things that are shipped in are turned into other things, *do not have relative efficiencies* based on location. … or adding inefficiencies like safety regulations we’ve mandated *by law*.)

                Factories located next to their customer have reduced shipping costs, in our just-in-time economy shipping and so forth becomes a big deal. Factory location also brings into play things like legal/governmental stability, electrical stability, availability of labor, and availability of other inputs.

                Small Business estimates the cost of compliance to be $10k-$15k per worker (link below claiming $35k in manufacturing). Lots of industries have massive bureaucracies which mostly deal with other massive bureaucracies. Note this is both a problem and it’s mostly invisible. The rarest resource in the universe is the attention of senior management.

                http://freebeacon.com/issues/report-cost-of-federal-regulation-reached-1-88-trillion-in-2014/
                http://www.politifact.com/truth-o-meter/statements/2015/oct/30/ben-carson/cnbc-debate-ben-carson-cites-high-cost-regulations/

                Dark Matter: On a side note, there’s a lot of really counter-intuitive stuff in all this and it takes a semester or two for most people to get their head into it.
                DavidTC: How long does it take for most people to actually learn what ‘efficiency’ is?

                You were staring at an efficiency increase and you totally missed it. In our textbook example, the output of the larger economy increased. The efficiency of the entire economy went up, even though it happened via trading with a partner who was actually less efficient than they were.

                Most of the benefits from FT come from opening up your own economy, i.e. imports, not exports.Report

              • Avatar DavidTC in reply to Dark Matter
                Ignored
                says:

                GDP/Job: $110,525

                Note this is a *serious* overstatement. This is mean, we want median, the Financial sector (etc) is going to be a serious distortion, so the amount of economic activity to justify a job will be a lot less. If we want to adjust for that…

                First, you’ve completely completely forgets sales tax exists yet again. To get people to be able to *spend* $110,525 on stuff counted towards the GDP, you have to give them $110,525 * 1.08 or whatever sales taxes is. A trivial fact, yes, but it is relevant.

                Second, you’re assuming that every extra dime people have will *go* towards the GDP. But, uh, no, it doesn’t. Not if they don’t spend it. Admittedly, poor people probably will, but you can’t just pretend *all* decreased costs will go back to GDP. It is *hypothetically possible* for human beings to save money.

                And you are, for some reason, looking at the productivity side of the GDP…but we’re actually talking about looking at GDP from the income direction here.

                The ‘distortion’ there is the fact that GDP is basically wages + corporate profits + investment income. So what is actually happening is you’re…sorta right in that each *current* job is less than $110,525…it is, in fact, exactly the average income, and the rest of the GDP is from corporate profits and investment income.

                The ratio is not GDP/Job: $110,525, the ratio is ‘GDP due to jobs’/job = exactly average income. This proves…nothing at all. It shows that each job is, on average, making the amount of average income. Good job, laws of math!

                And that leads us to the actual problem: To show that this would increase jobs, you’d have to show it increased the total amount of wages, *instead* of just increasing the total amount of corporate profit or investment income.

                Or, to put it another way: To make a $30,000 job, a business only does need to be willing and able to spend $35,000 or so. (‘able’ requires it doing several hundred thousand dollars worth of business.) The important thing in that sentence isn’t the ‘$35,000’ that you think it is, it’s the word *willing*. It has to be willing to do *that* instead of operating on the current amount of staff and giving that $35,000 to the owners. Or giving $20,000 to the owners and reinvesting $15,000 in the business, or reinvesting it all in the business. (Or even paying workers more, although that would tend to *average* out to more jobs.)

                And there is the problem: There have been *huge* increases in corporate profits and investment income over the decades, and wages have stayed steady or slowly declined.

                Now, it’s completely impossible to say where the extra money specifically *from offshoring* went. In fact, it doesn’t really make much sense….that’s just money being spent, and all the money floating around is, in some sense, fungible.

                A conspiracy involving 10s of thousands of economists and hundreds of governments? Why for?

                Erm, no, it’s not. Ecomonists are quite clear what they’re talking about when they talk about relative efficiencies. It is not their fault that people are being taught the theory of relative efficiency and then using it to justify something that doesn’t have anything to do with it.

                Factories located next to their customer have reduced shipping costs, in our just-in-time economy shipping and so forth becomes a big deal.

                Dude, can you actually *hear* this conversation? You do realize that is literally what I just said, right?

                Factory location also brings into play things like legal/governmental stability, electrical stability, availability of labor, and availability of other inputs.

                Again, is this thing on? *taps mic*

                You do realize you are supposed to be arguing *for* offshoring having more relative efficiency, right?

                Electrical stability, availability of labor, and availability of other inputs are relative efficiencies…and the US wins in all them! (Not sure about whether stability of government would technically count as a relative efficiency, but I guess anything done to *deal* with it would be…but the US wins there also!) As does it win in location! The US wins every comparison of relative efficiency there!

                To recap this thing we’re discussing that you seem to have forgotten: Offshoring factory work from the US is not justified via relative efficiency. It is only justified because *labor is cheaper*, which is *not*, economically speaking, classified as a relative efficiency. (Because cost has noting to do with efficiency.)

                Or to put it another way: If this was *actually* relative efficiency, than we’d have *American* factories making things for *China* also. That’s how relative efficiency is supposed to work, right?

                You were staring at an efficiency increase and you totally missed it. In our textbook example, the output of the larger economy increased. The efficiency of the entire economy went up, even though it happened via trading with a partner who was actually less efficient than they were.

                The economy does not have ‘efficiency’. The economy has *productivity*.

                And, again, the amount someone is paid has nothing to do with their measured productivity.

                And bringing in extra people and only counting their *work* and not their *consumption* is cheating on the amount of work being done.

                Productivity is (input+labor)/output. You can make *any* economy look really productive by ignoring input when you add people.

                Who is feeding those people? Where have the input supplies come from? What is producing the power?

                You want to talk about the ‘larger economy’ instead of America’s, you have to measure their *entire* economy and add it to ours. You can’t just grab the *output* of something overseas and pretend it’s part of the US GDP.

                And, incidentally, the economy is becoming more efficient all the time, but it’s generally due to technological advancements.

                Most of the benefits from FT come from opening up your own economy, i.e. imports, not exports.

                Again, that is literally what I am arguing. (Have I even *mentioned* exports?) You sound like some sort of weird PR guy not actually addressing anything I say.

                Free trade in factory work is a way to shift money from labor to capital by having lower labor costs, which also reduces the price of goods.

                However, *I* assert it shifts more money from labor to capital than it saves the average person, making it a net way for money to go upward. (This is actually pretty easy to prove…if it wasn’t a net profit for factory owners, *they wouldn’t do it*.)

                You…seem to be ignoring this idea completely, instead sprouting primers on free trade.Report

              • Avatar Dark Matter in reply to DavidTC
                Ignored
                says:

                Dark Matter: GDP/Job: $110,525
                DavidTC: you’ve completely completely forgets…

                The big distortions we should be focused on is mis-reporting of GDP or Jobs.
                1) GDP is problematic because there are aspects of the GDP which probably don’t involve much if any labor.
                2) The number of jobs reported doesn’t include things which add to the GDP (illegals or whoever working ‘off the books’, people working for themselves in some cases).
                3) The Bill Gates effect.
                All of these effects push pretty hard in the same direction.

                And yes, granted, this is a distorted view of things, I’m only going down this path because you object to my numbers without providing a sensible alternative.

                DavidTC: …you’re assuming that every extra dime people have will *go* towards the GDP. But, uh, no, it doesn’t. Not if they don’t spend it.

                The multiplier effect deals with this issue (that’s it’s job). If no one spent anything we’d have a multiplier of zero, if everyone spent everything it’d be infinity.

                DavidTC: And that leads us to the actual problem: To show that this would increase jobs, you’d have to show it increased the total amount of wages, *instead* of just increasing the total amount of corporate profit or investment income.

                Earlier you claimed the Stimulus, which did something similar (but worse designed and temporarily) did increase the number of jobs by just dropping money on the economy.

                DavidTC: There have been *huge* increases in corporate profits and investment income over the decades, and wages have stayed steady or slowly declined.

                Wage growth is off topic, and even if it were zero, you’re objecting to an effective increase in household income and a strongly progressive increase at that. Spending less money on clothing is nothing for the rich, but it’s a huge thing for the poor.

                DavidTC: Ecomonists are quite clear what they’re talking about when they talk about relative efficiencies. It is not their fault that people are being taught the theory of relative efficiency and then using it to justify something that doesn’t have anything to do with it…. Offshoring factory work from the US is not justified via relative efficiency.

                And yet my example of “relative efficiency” show trade worked just fine even though Country “A” was less efficient at everything. By all means, come up with some Country A/B, Product X/Y math which shows what you mean and why I’m wrong about what economists believe. One of us doesn’t understand what “relative efficiency” means in this context, perhaps the math will show it’s me.Report

              • Avatar DavidTC in reply to Dark Matter
                Ignored
                says:

                All of these effects push pretty hard in the same direction.

                You seem to think the GDP demonstrates something about jobs. It…doesn’t, really. Part of it is income, part isn’t. It can go up and down based on employment…and it can go up and down based on corporate ownership. It is an imperfect attempt to measure the economy, not any sort of attempt to measure jobs.

                Additionally, offshoring won’t raise the GDP at all! The GDP is the gross *domestic* product! It’s how much goods and services are produced *within the US*, or, to put it another way, how much money is distributed to workers and owners *from* producing those goods and services. Producing things overseas *lowers* the GDP, not raises it, due to things not being produced domestically. (Which is literally what the GDP measures!)

                And, on top of that, cheaper things *lower* the GDP, not raises it, due to people generally spending less and savings more. (Or, to put it another way, people roughly need the same amount of stuff, so lower prices means they spend less, even if they aren’t consciously ‘saving’.)

                Doing both, producing things overseas for cheaper, lowers the GDP even more!

                If I have $1000, and spend it on American clothes, I just added $1000 to the GDP. If the price of clothing halves, so I spend $700 on overseas-produced clothing (And let’s say that those clothes were $400 in value when imported, which means only $300 of that counts as ‘American production’, aka, the packaging and shipping and operating a retail store to sell them in), $200 on tacos from the local taco cart, and I kept $100 in the bank, I only added $500, aka, ($700-$400)+$200, to the GDP. Or, to do it via subtraction, I had $1000, and didn’t spend $100, and imported $400 worth of goods, so the amount of production I caused that counts towards the GDP was $500.

                In some sort of *mutual* trade setup, of course, that $400 in money I just sent to another country would then be spent purchasing *American* goods, and *that* spending would count towards the GDP. But, of course, we’re running a rather large trade deficit, so maybe $200 got back..

                Although note, even with out a trade deficit, that my example still lost $100 to the GDP via savings, and can’t possible make GDP be *higher*. People can spend more if they have more money. Actual, real money, in their bank account. They cannot spend more if they have the same amount solely because stuff is cheaper…they literally have the same amount of money! They can only spend it on *different* things.

                And the GDP, again, has very little to do with employment to start with! Employment *affects* the GDP, but the GDP changes based on a bunch of different things, only one of which is employment. (Which is obvious to anyone paying attention to the current recovery, which had GDP recover very quickly and employment lag way behind.)

                The multiplier effect deals with this issue (that’s it’s job). If no one spent anything we’d have a multiplier of zero, if everyone spent everything it’d be infinity.

                Again, taxes apparently do not exist in your universe. Because there *are* taxes, if everyone spent everything the multiplier would be, essentially, two.

                There is about 50% of taxes each cycle of money. That means every cycle causes ~50% to disappear. The first cycle you have 1, the second cycle is .5, the third cycle is .25, etc, etc. And all the cycles up and you converge on (But do not quite reach), a multipler of 2.

                ~50% disappearing a cycle is a rough estimate. But there’s an average income tax rate of 33%, plus 6% payroll tax with that income tax, plus 6% the business pays, gets us to 45%…plus there’s sale tax on the *other* side of the cycle, which tends to be about 8% as far as I know. OTOH, the owners are *not* paying payroll tax on their dividends. I think 50% is a reasonable guess. Again, that’s what is *possible*, not what actually happens.

                It’s not just sheer random chance that multipliers in the actual real world are somewhere below 2. Because you can’t really get above that with our current tax rates. (Oh, and it’s worth nothing that one of the best stimulus, increasing food stamps, with a multiplier of 1.73, isn’t subject to sales tax the first cycle. Well, that’s one way to add an extra 0.08% multiplier to it!)

                And anyway, the job of the multiplier effect is to tell you what money does to the *economy*, not what it does to *jobs*. Which, as I keep pointing out, are not the same thing.

                Earlier you claimed the Stimulus, which did something similar (but worse designed and temporarily) did increase the number of jobs by just dropping money on the economy.

                What do you mean, ‘worse designed’? The method you are talking about literally was not designed *at all*. It’s just random cheaper prices.

                And the stimulus cost us hundreds of thousands of dollars a year to make a job. *Before* any multiplier.

                If you want to argue that every unspent $300,000 floating around the economy causes a job to be added, I won’t disagree. I will certainly disagree with any number under $100,000, though.

                And yet my example of “relative efficiency” show trade worked just fine even though Country “A” was less efficient at everything. By all means, come up with some Country A/B, Product X/Y math which shows what you mean and why I’m wrong about what economists believe. One of us doesn’t understand what “relative efficiency” means in this context, perhaps the math will show it’s me.

                I think it is worth pointing out at this point that, regardless of this ‘relative efficiency’ thing, jobs are not the same thing as efficiency. In fact, they are literally the *opposite* of efficiency, as labor is an input. And efficiency goes *up* when inputs go *down*.

                As I pointed out, technology is something that actually *does* increase efficiency…by putting people out of work.

                You have conflated ‘jobs’ and ‘the economy’ again, assuming that because the economy is doing better, that jobs exist. In fact, that appears to be heart of everything you say, because you simply cannot grasp that something that is good for ‘the economy’ can be bad for the average American.

                Note ‘the average American’ is not the same as ‘every American on average’. Take ten dollars from every American, give that and another billion dollars to Bill Gates, and the Americans, on average, just got better off.Report

              • Avatar Dark Matter in reply to DavidTC
                Ignored
                says:

                DavidTC: Additionally, offshoring won’t raise the GDP at all!

                The Scientific consensus disagrees with you. Free Trade increases the GDP.

                DavidTC: cheaper things *lower* the GDP, not raises it, due to people generally spending less and savings more.

                Then you must be thrilled that the cost of healthcare and education are going up. Good for society and the GDP are they?

                DavidTC: Again, taxes apparently do not exist in your universe. Because there *are* taxes, if everyone spent everything the multiplier would be, essentially, two.

                First, the multiplier deals with taxes and it’s a measured value (which you proposed to be “2” and I agreed to).

                Secondly, if everyone spent everything then the multiplier would be “infinity”. I spent $500 on a TV => the guy selling TVs spends $500 on food => the food guy spends $500 elsewhere, etc. In reality money is taken out via taxes, savings, and so forth.

                DavidTC: what money does to the *economy*, not what it does to *jobs*. Which, as I keep pointing out, are not the same thing.

                If I tell you the GDP is tanking because of the economy, are you going to think the economy is also creating a lot of jobs? Increasing the GDP is good for jobs (and yes, the job market lags recoveries), and decreasing it is bad. Putting exact numbers on that is hard but those are the generalities.

                DavidTC: You have conflated ‘jobs’ and ‘the economy’ again, assuming that because the economy is doing better, that jobs exist. In fact, that appears to be heart of everything you say, because you simply cannot grasp that something that is good for ‘the economy’ can be bad for the average American.

                Are you claiming “the average American” would benefit by spending lots more money on clothes?

                And btw, agreed, we have problems with job creation (although there are signs we’re getting closer to full employment again short of changing laws). However there are things we can do to increase job creation without tearing apart the economy and going against the economic equiv of the theory of gravity.

                DavidTC: Note ‘the average American’ is not the same as ‘every American on average’. Take ten dollars from every American, give that and another billion dollars to Bill Gates, and the Americans, on average, just got better off.

                The example you’re objecting to put money in every household in the US by decreasing the cost of clothing.Report

        • Avatar Saul Degraw in reply to Dark Matter
          Ignored
          says:

          I wasn’t mainly thinking about free trade but Libertarianism as an overall package of small government with little to no regulation and little to no welfare state.

          You can still have free trade while maintaining regulations for products that are safe for human use/consumption and the handling of toxic substance disposal.Report

        • Avatar Chip Daniels in reply to Dark Matter
          Ignored
          says:

          Free trade is like free speech, in that it has different meanings to everyone.
          Does free trade or free speech mean no restrictions whatsoever?
          Well, no of course not.

          There is in fact a huge body or regulation defining what speech and trade are to be, what is allowed, when where and how it is allowed.

          And not surprisingly, these regulations reflect the moral norms and preconceptions of those who make the rules.

          This is why I dislike blanket advocacy for “free trade” because what it actually means is “I favor the current structure of international trade regulations and the outcome they are producing”.Report

          • Avatar Dark Matter in reply to Chip Daniels
            Ignored
            says:

            Chip Daniels: This is why I dislike blanket advocacy for “free trade” because what it actually means is “I favor the current structure of international trade regulations and the outcome they are producing”.

            Na, if I could simply eliminate all regulations and restrictions I would. I’ve had enough classes in this and went deep enough into the underlying math (admittedly years ago) that I understand mostly these regulations are for political optics and prevent us from hurting ourself.

            Trade barriers mostly hurt the country which creates them. “Dumping” mostly hurts the country which is ‘dumping’ and benefits the country which is being ‘victimized’. A lot of ‘free trades’ problems are political, the person being hurt by trade knows darn well who he is but the benefits are diffused widely. Proving that the benefits are a lot greater than the costs are non-trivially difficult and emotion normally trumps math.Report

            • Avatar Chip Daniels in reply to Dark Matter
              Ignored
              says:

              That’s my point, that what you consider “Truly Free Trade” is different than what we have now, the entity doing business as “Free Trade”.

              If the negotiations in TPP included mandatory minimum wages, or mandatory social welfare benefits in order to participate in the agreement, would it still be “free trade”?
              If I ignore regulations governing international intellectual property and patents, am I engaging “free trade”, or merely piracy?

              In other words, what is the difference between liberty and ordered liberty?

              And is that difference something objective that we can all point to and agree upon, or is it merely a rough consensus?Report

              • Avatar Brandon Berg in reply to Chip Daniels
                Ignored
                says:

                That’s my point, that what you consider “Truly Free Trade” is different than what we have now, the entity doing business as “Free Trade”.

                Do you actually want “Truly Free Trade,” or are you just casting aspersions on the closest politically viable alternative?Report

              • Avatar Chip Daniels in reply to Brandon Berg
                Ignored
                says:

                No, I don’t want “Truly Free Trade” any more than I want “True Socialism”, or any other imaginary unicorn construction that means everything to everyone.Report

            • Avatar Stillwater in reply to Dark Matter
              Ignored
              says:

              Dark,

              Personally, I have no problem with people who want to chase “free trade” down the rabbit hole to its logical conclusions. Have at it, I say! But down in that hole you find not only that job replacement doesn’t equal job loss for outsourcing nations, but you also find job loss due to automation. The proposed remedies for these types of losses are (on the one hand) that such a reduction in wages is just the natural economic order, so deal with it!, or (on the other) a GBI or somesuch, which is basically a political non-starter in this country even, in some cases, for free market rabbit chasers.

              It’s no wonder that people want protectionism when the current Elite consensus is to continue to ship manufacturing and service-sector white color jobs over seas or insource them to immigrants or eliminate them via automation while the rich keep getting richer. People want good paying work that doesn’t require them to be different than they actually are. No mystery there.Report

              • Avatar Dark Matter in reply to Stillwater
                Ignored
                says:

                Stillwater:
                …you find not only that job replacement doesn’t equal job loss for outsourcing nations…

                Source? This sounds more like politics than economics.

                Stillwater:
                …but you also find job loss due to automation.

                Automation is not related to free trade, they’re different issues. The local McDonalds might become automated (see link) but it won’t move to India. http://newsexaminer.net/food/mcdonalds-to-open-restaurant-run-by-robots/ Weirdly McDonalds is trying to do what the protestors want and make McDonalds jobs really good jobs and not minimum wage.

                I would be a lot more impressed with claims this technology must destroy jobs if I hadn’t heard it multiple times before. Every new technology is supposed to destroy jobs, but they also create jobs, we just don’t know what they’ll be called yet.

                (Warning: Rant ahead, partly because I used to own a small business)

                Having said that, I agree, we have issues with job creation, and skill mismatch between the unemployed and what industry wants. Something to point out is small business is *supposed* to be the engine of job creation, but needing a team of lawyers and accountants to create a job because of gov demands hits small business a lot harder than large.

                The nasty part about efforts to prevent job destruction is they tend to prevent job creation, and job creation is MUCH more important than destruction. The typical job lasts 2 to 4 years (link below). That implies anything which hurts creation is seriously going to hurt employment without helping retention.

                We want job creation to be the first thing a company tries, not the last (this means the creation of a job should be risk free from the company’s point of view). We don’t want job creation to be a ‘privilege’. We don’t want to destroy ‘bad’ jobs because that leaves more people fighting for ‘good’ ones and we want employers to be fighting for employees. My teenages don’t deserve a ‘living’ wage, I’d like them to have a really terrible minimum wage job for the experience and motivation (for me that was McDonalds).

                http://www.forbes.com/sites/jeannemeister/2012/08/14/job-hopping-is-the-new-normal-for-millennials-three-ways-to-prevent-a-human-resource-nightmare/#5c8183dd5508Report

              • Avatar Stillwater in reply to Dark Matter
                Ignored
                says:

                Source? This sounds more like politics than economics.

                Hey, you didn’t cite any sources in your comment! Why should I?Report

              • Avatar J_A in reply to Stillwater
                Ignored
                says:

                Given that the productivity of a -for instance- experienced factory worker in the USA is better than the productivity of a just hired Chinese counterpart, exporting jobs intuitively creates more jobs than it destroys, just to achieve the same level of production output.

                So I add my voice calling BS on your initial statementReport

              • Avatar Stillwater in reply to J_A
                Ignored
                says:

                Here’s the initial comment you’re responding to, the one you said was BS:

                But down in that hole you find not only that job replacement doesn’t equal job loss for outsourcing nations,

                The scope of my comment was limited to outsourcing nations. You chose to focus on net job differentials for both nations. And frankly, for unskilled or semi-skilled labor, there aren’t necessarily any more jobs created after free exchange than prior to it: it’s more a swapping of jobs, driven by – and this shouldn’t be a shocking statement – labor cost (coupled with shipping, etc.).

                China (for example) wins because it develops their economy; certain American businesses win because their costs are lower for comparable quality; consumers win because their prices have gone down; but the folks whose jobs were shipped overseas (or are insourced to cheaper immigrant labor, or lost to automation, etc) lose.

                I don’t think that’s at all controversial, in fact.

                The problem with Dark’s analysis/description of free trade is that it views actual human beings as variables in a math formula when they are, in fact, not any such things.Report

              • Avatar Michael Cain in reply to Stillwater
                Ignored
                says:

                China has extended an enormous amount of credit in order to guarantee those jobs, on the theory that at some point in the future US Treasuries will buy them something (other than “Here you go — $2T in $20 bills…”). They’re in a terrible demographic race — can they get rich enough before they get old? I’m glad that I won’t be one of the US politicians some time out there trying to explain that we’ve decided to pay for the Chinese oldsters’ retirement instead of the US oldsters.Report

        • Avatar Joe Sal in reply to Dark Matter
          Ignored
          says:

          Well I think it should be put to a question whether ‘free trade’ is about the accumulation of laws, regulations and ‘deals in general’ that favor multi-national profits and government forming thoroughfares to the cheapest labor pools in the world. Many economists understand that as something else.

          I don’t know if free markets can exist any amount of time beyond individual constructs without getting immediately corrupted.

          Capitalism manifested in social constructs appears to have a repeating problem.Report

  3. Avatar Dark Matter
    Ignored
    says:

    The amazing thing about the brexit is it’s unclear if it’s going to be an economic problem (I think it will be but that’s just me). Picture one of the 50 states leaving the union, say, Ohio. Forget the politics of it, the economics of it is clearly terrible.

    It’s been multiple decades, it says a lot of bad things about the EU that it’s not clear.Report

    • Avatar Michael Cain in reply to Dark Matter
      Ignored
      says:

      Which state you choose as an analogue is important. Or more accurately, states. The UK’s GDP, and share of the EU’s GDP, is slightly larger than the combination of NY, NJ, and the six New England states’ GDP and share of the US GDP. An independent Ohio’s economics are terrible; those eight Northeastern states, not so much. The 11 contiguous western states from the Rockies to the Pacific are somewhat bigger than the UK in GDP and share — more like Germany in size. Both of those regions are, by most broad measures, net tax donors to the rest of the US. Much as Germany and the UK are relative to the rest of the EU. While those regions might not be as well off as “independents” as they are today, they wouldn’t have nearly the kinds of problems that Ohio would.Report

      • Avatar Will Truman in reply to Michael Cain
        Ignored
        says:

        I agree with this. Ohio leaving is more like Scotland leaving the UK. The UK leaving the EU is more like California leaving. Roughly speaking. I’m not sure there is any state that would be better off, or equally as well off, leaving the US from an economic perspective. But there are some countries that could make a go of it nonetheless (and might find it preferable for non-economic reasons).Report

      • Avatar Dark Matter in reply to Michael Cain
        Ignored
        says:

        Michael Cain:
        Which state you choose as an analogue is important.Or more accurately, states…

        My (unresearched) feeling is that all of those states (or collection of states) have crazy high levels of their GDP tied into trade with other states. I go down to the local food store and very little can be local, probably all of it is out of state. My expectation is the rest of the store is similar.

        Similarly when I talk to people very few of them have lived their entire life in this state.

        Similarly the federal gov would be non-trivial to replace.

        The EU *should* be like this but either it’s not or the ‘stay’ people weren’t able to articulate their case.Report

  4. Avatar LTL FTC
    Ignored
    says:

    The progressivism Linker describes as animating the worst of the post-Brexit pants-wetting is not a progressivism that has existed for at least 40 years. Universalism is dead on the left. The dismay over Brexit is because white Britons, due to their identity as such, are limited in what they can do to further what they consider their own interests.

    It’s all identity politics now, which is only universal in its application. There is a hierarchy of oppression, and the U.K. is not showing the proper deference to its betters.

    The flaw of identity politics is that, in the absence of overwhelming force, it runs on shame more than self-interest. The failure for shame to work on Leave voters, the indifference with which they treated claims of racism, knocked down the edifice that had been built for years.Report

  5. Avatar Saul Degraw
    Ignored
    says:

    I am going to push back against Linker. I think that a big part of the Brexit vote was xenophobia and racism and other bigotries and this kind of bigotry seems on the rise all over the Western World. Possibly all over the world. We have our own major party Presidential Candidate who seems to have gone well past the dog-whistle:

    https://mic.com/articles/147711/donald-trump-s-star-of-david-hillary-clinton-meme-was-created-by-white-supremacists#.6YPsLaMeP

    Xenophobic and racist attacks and harassment are up in the UK since Brexit.Report

  6. Avatar Teckelvik
    Ignored
    says:

    The link that says “Labour needs Corbyn” leads to an article about Asian-Americans and affirmative action.Report

  7. Avatar Dark Matter
    Ignored
    says:

    LeeEsq:
    Many believers in free trade see it as an intuitively obvious good thing.

    “Buy American, keep the jobs here” makes a ton of intuitive sense even if it’s simply wrong from a math standpoint, and hearing that Econ classes have fancy graphs is going to be less than persuasive.

    It’s not until you get to the personal examples where it makes intuitive sense. A surgeon should NOT be mowing his own lawn to “keep the job in his family”, society (including him) benefit by him doing more surgeries and paying someone else to mow that lawn for him. The net benefit to society includes the creation of jobs by letting everyone do what they have specialized in (see also the theory of comparative advantage).

    LeeEsq:
    I think the real big blind spot with many libertarians is how the perceive government and the state. A lot of them see government and the state as so inherently evil that they don’t see to quite understand why many people, especially persecuted disadvantaged groups, aren’t more interested in smashing the state and joining the free market paradise. They really seem to struggle with why many people are wary of the market and trust government more.

    The gov has had a really good 50 year run, and the costs of its existence are seriously well buried. And then there are those gov promises… you’ll get free stuff and someone else will pay for it.

    LeeEsq:
    Its not perfect but many people see that their vote in elections, ability to protest, and other democratic actions give them more leverage over government than their consumer power does over businesses. Trying to get a business to change a labor practice you find unethical like child labor or blood diamonds by consumer action alone is not easy. Many other consumers either don’t care or the market makes it more profitable to continue a variety of exploitative practices even in the face of decently sized consumer protest.

    Business is less good at hiding the costs of compiling with a consumer protest, and most consumer protests are FAR less ethical and informed than your examples. Genetically Modified Food being one of many.Report

  8. Avatar David Parsons
    Ignored
    says:

    Dark Matter:A surgeon should NOT be mowing his own lawn to “keep the job in his family”, society (including him) benefit by him doing more surgeries and paying someone else to mow that lawn for him.

    I’d suspect that surgery is a much more intellectually demanding task than pushing a lawnmower around the yard; if “keeping the job in her family” is the reason she’s giving for doing her own lawnmowing, I’d suspect it’s an excuse for taking the time to mentally unwind.Report

  9. Avatar Mike Schilling
    Ignored
    says:

    See John Oliver destroyed!


    But I think he didn’t make a case. Two-thirds of one, and that’s good by cable standards, but really the standards ought to be higher.

    Pretty vicious stuff.Report

    • Avatar Kazzy in reply to Mike Schilling
      Ignored
      says:

      I think penning a piece in which you disagree with Oliver makes perfect sense. I think extrapolating that to a headline like “Is John Oliver Really the Best We Can Do?” is, well, kind of exactly what you are criticizing him for.Report

  10. Avatar Mike Schilling
    Ignored
    says:

    Kyle Orton seems more worried about Northern Ireland.

    But what does Chad Pennington think?Report

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