I see you recently opened up a golf course in Scotland. I presume that part of your business plan is for some Americans to take vacations to play there. But this raises some thorny questions.
You complain constantly about American firms moving jobs overseas. But couldn't you have opened up your golf course here in the United States? Wouldn't that have created jobs for American caddies and groundskeepers? Should we be concerned when Americans import golfing services from your foreign course? Would you as President slap a tariff on American tourists traveling to your course, as you have proposed for goods coming from China? Do you think such a tax would Make American Golfing Great Again?
Sanders is no fan of General Electric. He and the iconic American company have been trading jabsever since Sanders attacked the firm in an interview with the New York Daily News earlier this month for sending jobs overseas...
Let me start my rant here by stating the conclusion. To paraphrase Gordon Gekko, "Trade is Good!"
Let's take a look at a somewhat simplistic example to illustrate why focusing on jobs when talking about trade is silly. Suppose four friends, two farmers and two carpenters embark on a fateful trip aboard a tiny ship from a tropic port. The weather starts getting rough and their tiny ship is tossed. The ship splits in two, the farmers aboard one half and the carpenters aboard the other half. Each half runs aground on separate uncharted desert isle, within raft distance of each other.
At first the two groups don't know the location of their friends, so they take on the task of survival on their own. The carpenters readily build shelter, but over time, struggle to generate a sustainable supply of food. They spend a lot of time trying to grow food and in doing so take a lot of time away from building shelter. So they end up with inadequate food and shelter.
The farmers on the other hand have no problem with their food supply. Their farming knowledge allows them to quickly work the land on their island and are able to generate a minimally adequate food supply. If they could focus only on farming, they would have plentiful food, but they need to take much of their farming time and dedicate it to building shelter, something for which they are not trained. The shelters they build are weak, and are frequently damaged by tropical storms due to their inferior carpentry abilities.
One day while scavenging for food on a high spot on his island, one of the carpenters sees a nearby island, that looks as if it is reachable by raft. Using their carpentry skills, the carpenters build a raft, and one of the carpenters sets sail for the other island.
Upon arrival, the hungry but well-rested carpenter finds his farmer friends, healthy from their adequate food supplies, but weather beaten and tired from their inadequate shelter. The farmers, glad to see their friend, explain that they are having no problem growing food, and could grow more than enough if they didn't have to waste so much of their time trying to constantly fix their shelter. The carpenter tells the farmers that they are having no trouble making shelter, but they are starving. If they had more time, they could build tropical mansions for themselves, but they are constantly using their time to just find enough food to survive.
So the carpenter makes the farmers a proposition: If you two dedicate all of your time to farming, you can grow more than enough food for all four of us. If we spend all of our time building, we can build luxurious shelter for all of us. So let's do this. You grow food, we'll build shelter and then we will trade. In return for some of the food you grow, we will come to your island and build you shelter.
The farmers agree to the deal. The farmers outsource their carpentry jobs to the carpenters' island and the carpenters outsource their farming jobs to the farmers' island. The farmers farm, the carpenters build.
What is the result?
Better food supply, better shelter and EVERYONE REMAINS FULLY EMPLOYED doing what they are good at doing*.
And that is the point of trade.
Trade makes everyone better off. The fact that some jobs move to places where those workers can specialize is a good thing for everyone. In return, we get cheaper goods and services, and we get the opportunity to produce those goods and services for which we have the comparative advantage. Everyone wins.
Trade is not a zero sum game. It's not 'if we export, we lose and they win.'
The question isn't whether we lose jobs to trade. We do.
But we also gain jobs from trade. It's just that those jobs are different.
And different makes people uncomfortable.
The U.S. is now a service based economy.
And that's a good thing.
But, are we providing the educational and job training opportunities for those caught up in the churn to succeed in the service economy?
If not, some will be left behind.
And that's not a good thing.
Let's stop worrying about which jobs are outsourced and what we are trading and instead focus on providing the education and job training for the future.
*And if you're wondering why one of the carpenters doesn't move to the farmers' island and one of the farmers move to the carpenters' island to make everyone better off, well, that would be immigration. And we all know what we think of immigration.
The Department of Agricultural, Environmental, and Development Economics (my department) in the College of Food, Agricultural and Environmental Sciences (my college) at The Ohio State University (my university) is hiring for four new faculty positions--and I am not ashamed of taking advantage of this blog to promote the positions. If you have (or are close to earning) a PhD with interests in agricultural economics, environmental economics, regional economics, development economics or some combination of those fields along with other interests, then we can probably align your interests with one of our four positions.
Assistant or Associate Professor in Global Economic Modeling: a tenure-track assistant/associate professor position in the area of global economic modeling and integrated assessment. Economic modeling approaches of particular interest include dynamic optimization and computable general equilibrium modeling, as well as familiarity with approaches for handling decision making under uncertainty. Individuals with experience integrating economic models with physical/biological models are encouraged to apply.
Assistant Professor in Agribusiness: a tenure-track assistant professor with teaching and research responsibilities in agribusiness. Applicants with interests in agricultural markets and marketing, finance, supply and demand analysis, industrial organization, international trade or agricultural and food policy, that complement a primary interest in agribusiness are encouraged to apply.
Assistant or Associate Professor in Sustainable Development and Economy: an assistant/associate professor, tenure-track position to develop an internationally recognized program of research and teaching focused on sustainable development and the trade-offs among economic development, social equity and environmental protection in international or regional contexts. Areas of interest include, but are not limited to: economic growth; equity; resource use; technological change; socio-ecological systems; sustainable and resilient communities.
Click on the links for full descriptions and application info.
Dumping is pricing a export good below cost (and losing money), why would anyone do that?
In a move that seems likely to increase trade tensions, the Commerce Department plans to impose tariffs on solar panel imports from China, Keith Bradsher and Matthew L. Wald report. The tariffs are relatively small — 2.9 percent to 4.73 percent — but additional ones could be imposed in May, when the Commerce Department is to decide whether China is dumping panels in the United States. The department has already ruled that the Chinese government is providing illegal export subsidies to its solar manufacturers.
Dumping and providing illegal export subsidies can only help the U.S. consumer, the same consumer that is suffering from higher gas prices. Unless you use some dynamic argument that this temporary protection will afford the domestic industry time to achieve scale economies or savings from learning by doing. Both of these industry effects are speculative.
"This blog aims to look at more of the microeconomic ideas that can be used toward environmental ends. Bringing to bear a large quantity of external sources and articles, this blog presents a clear vision of what economic environmentalism can be."
Don't believe what they're saying
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