Comments on economics, mystery fiction, drama, and art.

Monday, November 14, 2016

Worth reading.

I've been saying for years (nigh on to 45) when I have taught comparative advantage and the gains from (international) trade, that it is essential that we realize that "The US gains from international trade" is not the same as "Everyone in the US gains from international trade." (I occasionally drive by an empty lot on East Michigan Street in Indianapolis that used to be--and was, when I was in high site of the largest television assembly plant in the world; it is now, and has been for years, a vacant lot. Not only has everything associated with making TVs gone away, there's a site that has to be more than 100 acres of urban land sitting empty.)

The US gains from international trade. But we have to use those gains so as to make sure that the economic activity that is displaced is *re*placed, and the people whose livelihood has been taken away, are assisted. What does that mean? It means thinking carefully about how we can develo/redevelop new economic activity--how can we create a climate (everywhere, if possible) in which new businesses can start up, and the successful ones flourish? How can we help people who might look at what happened to their last job, and who think they can create something? How can we help people whose skills (and experience) have lost some of their value develop new skills, or find new places to work? (Yes, relocation assistance.)

What we have done is say, "The US gains from international trade. But you guys--you women and men--whose jobs have gone, you women and men whose businesses have been rendered unprofitable--you are on your own."
We are a richer country, as a whole, because we have been willing to trade.
We need to be a country that makes sure that, insofar as possible, we all benefit from those gains.
And the political leadership of this country--Republican and Democratic--has failed here. (My own opinion is that the Democrats have at least tried to develop programs that work, but that's a different rant.)


Post a Comment

<< Home