The Biz Bucks Blog provides former Biz Bucks students and other busy professionals with a summary and commentary of seminal articles from the opinion pages of the Wall Street Journal. You can be notified of a new posting by subscribing to the blog (enter email in box on right) or by following on Twitter: @BizBucksGuy.
Protectionism is Destruction-ism March 16, 2016 11:59 AM | Tagged as Reagan
WSJ 16 March 2016 “Making the Case for Trade” by Morton Kondracke and Matthew Slaughter
The current leading candidates for president are all for protectionism, at least as their rhetoric indicates. Cruz, Trump, Sanders, and Clinton are pontificating about the way trade hurts America. They are wrong. Kondracke and Slaughter, no slouches they, made that clear in the referenced op-ed. Kondracke is the retired executive editor of Roll Call, the capitol-hill newspaper. Slaughter is Dean of the Tuck Business School at Dartmouth.
Like Kondracke and Slaughter, The Biz Bucks Guy is awaiting an adult in the room to speak up, or better said, a leader. That would be someone who speaks truth to populist pandering.
Mr. Trump has a clothing line. His name-brand goods are largely produced in Mexico and China. He saves labor costs because Mexico and China have the comparative advantage over the US in textiles. What is forgotten about this arrangement is the American consumer benefits from lower prices of Trump shirts, et al. With lower costs to American consumers, Americans can afford other products that are made in the USA. The net is an advantage to US citizens.
Yes, some Americans lose their jobs to trade. We gained 5.4 million jobs in December. What is not known is we also lost 5.1 jobs, for a net increase of 300,000 jobs in one month. The churning of jobs happens all the time. No government program will fix that. It is too bad that people lose their jobs, some to trade, some to products not making it in the marketplace. It is the nature of a free society.
But to erect trade barriers – to protect people from losing jobs -- will slow our economy. Such protectionism was to blame for the deepening and the lengthening of the Great Depression of the 1930’s. The Smoot-Hawley Act protected our jobs and initiated a decade of problems. Other countries were forced to do the same, and trade slowed to a trickle.
Here’s a parlor question: In what decade did we have a trade surplus? The answer is the 1930’s. How did that trade surplus work out for America? Of course, not well.
As quoted in this op-ed, President Ronald Reagan made it clear, Protectionism is Destruction-ism. Many American jobs are destroyed by this fallacious populist goal of bringing our jobs back to America. The only government response to job loss might be an initiative to provide training programs to adjust American skills to the marketplace.
Posted in Trade | 0 Replies
To receive email updates when a new post is made, please enter your email address in the box below and click Subscribe.
Use these key words to search past blogs:
1994 97% Alesina Recession Alinsky Allesina austerity Baloney BAT Binz bird kills Bogle Border Adjustment Tax Brulle Bryce capitalism carbon Carbon Dioxide CBO CFTC chains China Churchill Climate Climate Change Clinton Comparative Advantage Crichton Cronyism Cummins Curry Darwin Death panel demographics population economics Denier derivatives Dodd-Frank Drug dynamic Dynamic Scoring education electric car Energy Energy Policy Enron Debt Entitlements Eugenics Fat Fry Flat Earthers fracking free markets free trade Free Trade E-Verify Free Trade Zoellick Freedom Heritage Foundation Friedman gas lines Gas Prices glaciers Global Warming Global Warming Sustainability global warming subsidies IMF Globalization Trade God Google Gore Green Blob Grifo Groupthink Growth Hannity Hayek Hostess Hybrid Immigration Imports index funds Indexing Intellectual Denial investing investment IPCC JFK Joint Tax Kennedy Kerry Keynes Keynesian Keynesian Tax Cuts King Barak Bird Kills Koch Koonin Laffer Lamar Smith Lomborg macroeconomics macroeconomics;static; dynamic MACT Makiel markets Marxist medical care minimum wage Mitchell Model T Moore Morgenthau Navarro Neumark NOAA NY Times Obamacare ObamaCare Rove Health Insurance O'Reilly participation rate Patrick Moore peer review Peer Review EPA Piketty Pipelines plywood Presidential authority Price Controls Pruitt Racial divide Rare Earth Reagan Recession REE Renewable Portfolio Standards Renewables Ricardo Ridley robotics RPS Ryan Schlaff Science science integrity scoring Settled Science Shaffer shortages socialism socialized medicine Solar Panels Solvaldi Sovaldi static steel STEM Stephens Steyer stimulus subsidy sugar Supreme Creator tax policy Taylor territorial taxes corporate taxes Tesla Trade train wreck Trump unemployment wages Wind wind power women Zuckerman