blackangst1
Lifer
- Feb 23, 2005
- 22,902
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Originally posted by: WhipperSnapper
Originally posted by: Vic
You're looking at it from a lopsided point of view. Economies are not static, the amount of wealth in the world is not fixed.
I agree with you that wealth does not exist in static quantities and that wealth first has to be produced before it can be begged for or stolen. (Remember, I used to go around hitting people upside the head with hardcover copies of Atlas Shrugged.)
They're not "leaching off us," it's mutually beneficial, as free trade generally is (who would freely and knowingly enter into a trade agreement that hoses them?). They get more jobs and higher wages than they had before, with massive investment in their infrastructure, we get cheaper goods and open up larger markets that were not previously capable of purchasing our products.
And...what do we get? Cheaper goods--at what expense? At the cost of lower middle class and middle class jobs?
If free trade is always necesarily beneficial and if all international trade is necessarily an instance of comparative advantage, then why has our trade deficit been skyrocketing in recent years and why has the U.S. economy failed to produce jobs in import-export sensitive areas? Is it possible that what we are witnessing is not comparative advantage but rather an instance of absolute advantage?
You say that we are opening up their markets to our goods (assuming that these nations would relax their own trade protections), but why would they purchase goods and services produced by expensive American labor when (1) they can produce them less expensively themselves and (2) as a result of having lower wages they couldn't afford to purchase American-produced goods and services in any significant quantity?
Granted there are larger issues, like the environment as you mentioned, but no amount of tariffs will ever resolve that issue. If they can't be forced to be more green through international pressures, then it is a certainty that with economic advancement and prosperity, their increasingly educated populaces will demand more environmental protection, just like every other developed country in the world already has.
Oh--and I would tend to agree with you that eventually, over time, if all of these nations adopted free market economies and that if we had unrestricted international trade that the end result of global labor arbitrage would be an averaging out of the standard of living worldwide and that the standards of living in these other countries could rise to the standard of living in the U.S., preventing any further declines in the standard of living. So, eventually the U.S. wouldn't need to lower its environmental standards in order to compete because other countries would have similarly high standards.
That's just wonderful and it gives us all warm-fuzzy feelings. Unfortunately, because the overwhelming majority of the world's 6.5 billion people are deeply impoverished, it could take centuries before global labor arbitrage becomes an insignificant force and before the American standard of living returns to its previous high. That will be great 300 years from now.
However, in the meantime, if you're going to live the bulk of your adult life over the next 50 years it's going to suck as the U.S. standard of living is dragged down to meet the standard of living in the third world.
Of course, you know my prediction: The United States is going to become an overpopulated, impoverished third world country as a result of the popularly-held morality of altruism, a lack of any sense of rational selfish economic interest, and a failure of the populace to understand basic economic principles while embracing free trade dogma.
Not in our lifetimes, and certainly not in our children's either. Perhaps you need to travel to a few 3rd world countries to understand what REAL poverty is. The percentage of families living in extreme poverty is astronomicaly low. Im not blowing my own horn or anything, but my passport is filled with entry stamps from over 35 countries, many of which are ridden with poverty, and certainly far far lower than here in the US.
"Standard of living" is relative depending on where you go. My wife is a tax preparer, and every year she's amazed how people get by. You see, if your income is greater than $10,200, you pay taxes. Below that, you dont. Many many people come rolling in to do their taxes in a decent car, wearing decent clothes, and getting $2000+ refunds (on UNTAXED INCOME) due to head of household and child credits. Go to a third world country and see how many "poor" have a non leaking roof over their head. Or a car. Or a TV. Or a microwave. Or a washer and dryer. Or an oven. Or government paid food. The list goes on and on.
Im sick and tired of people crying about how bad the middle class has it in this country. Spend some time in a REAL poverty stricken country and you will appreciate what you have as you climb into your warm bed, under a non leaking roof, surrounded by walls that dont leak.
