User talk:Uris/LibertyPartII

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I have seen people saying jobs get lost because of free trade, which is highly controversial. But even those who say jobs get lost say that total GDP rises, even if the benefits only go to the rich. As an economist I wonder how you come to your conclusion? How would you compensate the loss of consumer power if you had to buy US clothing instead of cheap Chinese? Get-back-world-respect 04:14, 13 February 2006 (UTC)

It may be a minority opinion currently, but many agree with this statement from what I linked:

"University of Maryland Professor Peter Morici argued in a note Friday that the trade gap is hurting American workers more than they are being helped by lower prices. "Were the trade deficit cut in half, GDP would increase by nearly $300 billion, or about $2,000 for every working American," he said. "Workers' wages would not be lagging inflation, and ordinary working Americans would more easily find jobs paying good wages and offering decent benefits." Morici also argued that the growing trade gap poses a long-term threat to U.S. competitiveness, companies and workers. "By shifting employment away from trade-competing industries, the trade deficit reduces U.S. investments in new methods and products, and skilled labor," he said.

As far as "replacing the loss of consumer power", the middle class would be far better off! With better paying jobs rather than cheaper goods. America's rich don't buy from Wal-Mart anyway, so they wouldn't be much affected (and if so, would notice little). Not to mention that outsourcing also affects white collar workers these days as even investment banking analyst jobs are being given to people in India working for extremely low wages. Uris 04:24, 13 February 2006 (UTC)

Well, the rich usually benefit because they invest in outsourcing and thereby make bigger benefits. Some estimate that for every job lost several are created. Have you read NY economist Jagdish Baghwati? [1] Get-back-world-respect 17:51, 13 February 2006 (UTC)

Economists disagree on the subject of how much or how little the wealthy benefit, but nearly all agree that middle-class earnings would go up with tariffs rather than free trade. I have an undergraduate degree in Economics so I was forced to read a whole lot of this "free trade helps everybody" crap that is being challenged by economists such as the professor I quoted in the last paragraph. The bottom line is that jobs created by free trade in America tend to pay very little compared to those lost.

Free trade is great for smaller or less developed countries, but the U.S. has 300 million people and the world's largest economy by a factor of 3 (over Japan). It is one country that can get along just fine without the developing world undercutting American wages. Uris 17:59, 13 February 2006 (UTC)

All big economies engaged in trade when they became big. Most of biggest US companies became big by serving foreign markets, too: Coca Cola, Microsoft, google, TimeWarner & Co, McDonald's & Co... They all employ many many people. And I still do not see how you would want to have the same purchasing power if your apparell costs quadrupled. Get-back-world-respect 23:09, 13 February 2006 (UTC)

Quadrupled, huh? I don't spend much on clothes a year, do you? Middle-class workers could earn more, say 20-30% more, than they do today. That's a difference in $10,000+ annually for American workers while you are talking about saving $100 a year on clothing. And I'm not saying don't engage in trade, obviously. I'm saying don't engage in free trade. Call it balanced trade or fair trade if you want, but I don't follow those movements. What America would benefit from is tariffs no matter what you want to call them. Uris 23:13, 13 February 2006 (UTC)

How do you get your estimate of $10,000? Usually tariffs just benefit small workers' groups in particular industries while harming everyone else. Take the steel tariffs. Protected some workers for a while, cost the job of many other others and lowered purchasing power of all American because of increasing steel prices and thus harm in the automotive industry and others. Or the ridiculous tariffs on sugar we have both in the EU and the US. Great, we protect some sugar farmers, not even .1% of the population. We all pay for it with our taxes, and if the tax money was given directly to the farmers everyone would be better off. How can you call it "fair trade" when developing countries get ruined with protectionism in the agricultural sector while they are forced into "free trade" in other sectors with international institutions like IMF and Worldbank? Get-back-world-respect 23:28, 13 February 2006 (UTC)

Look at the 1950s and 1960s when America's middle class (before free trade) made what is now made in China and India with what basically amounts to slave labor. They were more than $10,000 better off than today in real terms. The only thing that has changed has been free trade agreements and companies moving production to China and India (and they will leave those countries too when they are no longer the cheapest sources of labor). Uris 23:40, 13 February 2006 (UTC)

You cannot just argue on now and back then and tariffs are the difference. Major differences include also that China and India are now able to do what they were not able to do now, and new technologies and improvements in transport allow to trade what was not as easily tradeable then. If you just isolate a country now it falls behind those who take advantage of trade. Trade is just an opportunity you take because it is beneficial. Tariffs restrict your opportunities and the liberties of the individual. ([2] Nice picture for good night, just found it when searching for the guy who allegedly took part in the holocaust cartoon competition) Get-back-world-respect 00:46, 14 February 2006 (UTC)

"Trade is just an opportunity you take because it is beneficial." That's what I believe, trade when it is beneficial (i.e. not with slave labor markets like China, who will be replaced and left behind by these companies for other countries when their own labor market develops). What you believe is more like we should just trade for the sake of free trade, ignoring the giant trade deficit here. It's easier for you to say that because you are from a smaller country that can not flourish without free trade (and that does not have as large a deficit). Here in the States, it is beneficial only to large corporations who make large contributions to political campaigns and that does not mean it is beneficial to the people here being forced into these free trade agreements (by the politicians elected by the bankrolls of these corporations during each election cycle). Uris 01:06, 14 February 2006 (UTC)

Why shall you decide when trade is beneficial and outvote all those who benefit from it? And why are our protectionist wages "just" while wages in developing countries are unjust? Isn't it unjust if we export our unemployment there using tariffs and subsidies? I cannot see why we should benefit from trade selling our software, softdrinks, movies, machines, cars, etc. to all the other countries and deny them access to our markets. I agree that some labour and environmental standards should be universally set up. Unfortunately most people from your country seem to oppose multilateral agreements. I am from the EU, which has a combined GDP slightly higher than the US and still benefits a lot from external trade. In the rich EU economies people were also scared when Portugal or Greece joined but as we see years later it was to the benefit of all of us. You did not address the issue of the agricultural subsidies.? Get-back-world-respect 11:21, 14 February 2006 (UTC)

The EU is not a country... it is a free trade agreement itself, and your individual country could not survive without it. When you ask me "why export unemployment" you imply that we are currently importing unemployment from other countries. Exactly! Why do we want to sacrifice our own workers for the sake of people who don't pay our taxes? Agricultural subsidies are great, why would I want to address them? It's what our entire economy should aspire to. If we didn't have them, we would import all of our food. Then what happens when war breaks out? We'd either starve or be forced to occupy the countries that still grow food, and that's not how we would want to conduct things. You say we benefit selling our good abroad, but we import *far* more than we export. We do NOT export our Coca-Cola to other countries... they are bottled in those other countries so that is not an export at all. Software is also downloaded from international sites, so that is also not an export. Thus, I'm not saying that America should not buy Toyotas... but they should be made in the USA when sold in this country (and most of them are these days so I'm not singling out Toyota). You guys can not live without free trade in the EU... the U.S. can live without it very well, and in fact would benefit more without it. Uris 13:28, 14 February 2006 (UTC)

Tradewise the EU is just like the United States, a union of regions that agreed to remove trade barriers. It would not make sense to try to live in autarky, neither for Wisconsin nor Spain. The US is not importing but exporting unemployment with its agricultural subsidies which I already explained are spent on a tiny fraction of the US population but paid by all the others and in such a stupid way that everyone would be far better off if the goods were imported and the subsidies paid directly to farmers who would earn more in more competitive sectors. At the moment the subsidized agricultural products even get exported and drive those out of the markets who could produce much cheaper. Are you sure you want your government to pay for the misery elsewhere? Not even the US is likely to get into a war with all countries that focus on agriculture, and it is highly unlikely to become dependent anyway, it would just benefit from lower prices and in many cases even quality. If there is some dependency to worry about it is oil. You just have to accept that as it is, the world runs that way today. Fortunately economies are so well interconnected that in case of regional military conflicts what cannot be traded with those regions can be replaced by others. The more countries trade the less likely they are to go for war because they would harm themselves.

As for foreign companies not paying US taxes, US companies exporting to other countries do pay US taxes, so it would just even out. It does not because the US exports far less goods than it imports, it exports bonds instead. So your country is getting more and more reliant on foreign money, which I agree is a problem.

Coca Cola exports its brand, and the benefits go to the headquarter in Atlanta even if they are earned by foreigners abroad. Foreign direct investment is closely related to trade. Software even when downloaded still is trade, the benefits directly go to the US.

Why should cars be built in the US giving away the advantage of the place where they are best to be built? The US can benefit from lower prices and focus on what the US is best at, just like any other country should. Get-back-world-respect 15:05, 14 February 2006 (UTC)

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There is no problem with exporting brands. Again, Toyotas made in the USA are great cars built by American workers, despite the Japanese brand. They are made just as well in the U.S. for the same manufacturing cost as they are in Japan. This wouldn't be true for Wal-Mart goods made in China, which is a good thing for the American worker. We seem to be going in circles about this though, I say that American GDP will increase without free trade, and certain economists agree with me. You think otherwise, or that Americans should worry about foreign workers before it worries about its own. I disagree, and it seems I've taken all the ECON courses you are quoting from here so neither of us is really venturing into new territory with any of this... thus, this is probably the end of this convo on my Talkpage because it is consuming too much time to continue rehashing the same statements over and over. Uris 15:12, 14 February 2006 (UTC)

I agree that there is no problem with exporting brands, I just wrote about it to refute your argument that the US did not benefit from Coca Cola sales abroad. Why not let companies decide on their own where best to construct? The art of discussion is exchanging points rather than going in circles. You still did not address the point that agricultural subsidies are to the benefit of only a small fraction of the home country but drive large numbers of foreigners who produce with lower capital intensity into unemployment and it would be beneficial for everyone if they were paid directly to domestic farmers while importing the goods. Get-back-world-respect 15:22, 14 February 2006 (UTC)

When did I say the US did not benefit from Coca Cola sales abroad? I never said that. You aren't following the coversation very well. Agricultural subsidies benefit everyone in the U.S. by ensuring our food supply is not dependant on forces we can't control. You say we won't go to war with the countries producing enough food to feed 300 million hungry Americans, but how do we know they won't be invaded by another power at some point? We don't. Every country needs to grow its own food (or produce its own oil) if possible, and the U.S. isn't the only country with this philosophy. Japan, which unlike the U.S. has no room to grow food, tries to keep as much of it grown internally as they can.

Unless you can come up with something other than "you said the US doesn't benefit from Coca Cola sales" when any child could understand that's not the case, or "you still haven't commented on agricultural subsidies" when I so obviously did, I see no reason to continue. Uris 15:26, 14 February 2006 (UTC)

I see no reason for impoliteness. You wrote about foreigners not paying your taxes and Coca Cola and software not being export and foreign in reply to my argument that the US also benefits from trade so I assumed you wanted to say that US companies' activities abroad did not benefit you. Sorry for the misunderstanding. So if we both agree that developed countries benefit from trade and foreign direct investment, why shall other countries be excluded from that? I cannot follow your ideas about war, there has not been any conflict that was a serious threat to food supplies since WWII, and if there ever is another war of that scale to start no one will survive it anyway. You just say agricultural subsidies are beneficial although I gave you a detailed explanation why they are not. I would furhtermore say that they are not there because of paranoia about food dependency but because farmers' lobbies have a stronger impact than the average man who has to pay - not to speak of the millions of unemployment farmers abroad. Get-back-world-respect 15:43, 14 February 2006 (UTC)

Okay, you convinced me. Free trade is awesome! Uris 16:04, 14 February 2006 (UTC)

Do you feel unable to end a discussion in a polite way? Get-back-world-respect 16:52, 14 February 2006 (UTC)

I feel that you are unable to leave a conversation, period. You have to have the last word on other people's Talk pages, and it gets old. Uris 16:54, 14 February 2006 (UTC)

I do not need to have the last word, I just prefer discussions to end with thank you, it was a pleasure, I got some new insights, we however agree to differ. That is how people with manners do it, right? Get-back-world-respect 17:00, 14 February 2006 (UTC)