They are too stoopid to know they are doing it, but our Congress is destroying the US economy, one law and regulation at a time.

I hear that there was a country that tried for the 0% unemployment rate, among other things. It was called the Soviet Union. Wonder how that turned out…

That we’ve decided to emulate it.

I hear that there was a country that tried for the 0% unemployment rate, among other things. It was called the Soviet Union. Wonder how that turned out…

“…we are committed to a plan that will save or create 3 million jobs…”

That bar is so low you would need to take the subway not to be above it.

“Thanks for the question, David Gregory, and we do indeed believe that any fair assessment of the situation will reveal that while our policies only created 15,000 jobs, all of them in federal government, they clearly saved over 25 million jobs. Thanks again David, and I hope you will be over on again Tuesday to administer my weekly back massage and pedicure.”

Mike gamecock DeVine Sunday, January 4th at 10:59AM EST wrote:

I think there are great arguments for totally free trade that show that same would be a huge net benefit to the United States no matter the conditions of competition in other nations and even if they don’t reciprocate with free trade in their countries. Milton Freidman and otehrs have made this case.

…

But ultimately, I beleive in the invisible hand of free markets and that concept (can’t think of the name?), strategic advantage? that shows we benefit from trade with those that can make goods cheaper.

I believe the term is Comparative advantage

The framing mistake that most people intuitively make when considering this issue is to think in terms of a fixed amount of work. But from Econ 101, we know that when we move the entire supply curve to lower prices (through innovation), the quantity demanded at the intersection along the existing demand curve will increase.

In a free market, there will always be a demand for Company A to beat Company B. When US companys/workers engage in that innovation game, they maximize wealth. Focusing on rent seeking through protectionism, however, may temporarily provide the protected (e.g. UAW auto worker) temporary excess rents (e.g. above mkt salaries), but it is not in the best interest of the US, and in the long run incentivize customers to substitute other goods/services for those under protection.

1. “people simply prefer to patronize firms that are close to their own geographic culture” really means people shop where they live. Thanks for that clever insight. Just because one makes a purchase locally (because one is forced to due to ones inability to teleport instantaneously to the location featuring the ‘best’ price, quality, ect.) it does not follow that that purchase ‘helped’ the location as you would define it. Example. I buy apples at my local supermarket. It does not follow that these apples were purchased from a local farm.

2. As the comment title says: what Homo Economus really means is rational. You may be shocked to know this, but because you even used the term homo economus I just assumed you knew. Many ‘people theories’, or ‘behaviour theories’ use the assumption that we are homo economus, or in english, rational. It actually, in my opinion, does humanity a disservice to assume we are not rational. I may infer from your disagreement with the the idea we are rational that you place to much weight on emotions. They have their place, but for the purpose of this discussion they are really marginal. People look for the best ‘deals’ when making purchases, not necessarily where the product was made.

3. “We are a country; not merely a market. It is unwise to rely too heavily “on the kindness of strangers” for all our material / industrial / energy needs”
That sound Jacobinish to me (10 points for FR reference). Most freedom loving right thinking people have the view that government should exist for limited purposes. One of those purposes is the securitization of markets (in english, to guard the market and trade routes). The world is ‘merely’ a market, and that realization has ‘merely’ lifted hundreds of millions, maybe even over a billion people out of poverty around the world. We are all strangers. The butcher at your local market does not know you, yet he prepares your meat. He does not do this because he is a nice man. He does this so you will pay him. Because we do not force the butcher to ‘buy local’ the butcher is able to get meat at the best price point, quality level, ect. available to him and you are able to get your supper at a ‘market’ , or in english, reasonable, rate.

4. China has slave labour. Its really a fuedal society, nice sky scrapers as so much window dressing. It undercuts the labour costs of all its competitors (remember, unlike Pej says, the world really is flat ie: global, and hence China undercuts labour worldwide, depressing price but thats a whole ‘nother topic) and grows its economy through manipulation. You should thank Fortune that you are not in China. Japan, as has been pointed out, is no candle in the darkness. It offers lessons for us, sure, but lessons in what not to do.

In an other industry, I’m sure Louisiana-Pacific and Weyerhauser would like to use trees from the American West where they once had a vast timber infrastructure to use trees from both private and public lands. In the West, most likely the lumber in your newer home came from Canada, not the US. Now Canada is NOT a low-wage, low-standards country, yet the entire timber industry in the American West has been essentially destroyed by US environmental law. The say international borders are imaginary lines on maps, but I’ll guarantee you the border between Washington and British Columbia is visible as you fly over it; that border is where the logging stops.

Free trade is a delusion. On the basis of our tax system alone, American industry and the American worker is dramatically disadvantaged in competing with any Country that relies primarily on some sort of VAT to finance government operations rather than corporate and personal income taxes and property taxes. In the aftermath of WWII when we were the only manufacturing power in the World for almost two decades, it made some sense to let the rest of the world pay for our government in the price of our exported goods. We have not been a net exporting nation in a very long time now, yet we still try to act like we’re one.

I’ll accept the notion that the American worker should be a better smarter more skillful worker to support his standard of living versus the Third World labor, but it is more than the cost of his labor that is stacked against him and the government is itself responsible for most of that stacked deck. Crazy tax laws and government policy drove the housing and credit crisis. Those investment houses, banks, and insurance companies have all sorts of built in inefficiencies and Godawful labor costs, but nobody demanded that those guys sit down at the table and puke up wage concessions before they got their bailout. At least the UAW guy makes something real. What the Hell is a deriviative?

In any event, any time this subject comes up, all the focus is on American wage costs and usually on union wages in the heavier industries. It isn’t just the labor costs that disadvantage American steel, heavy equipment, locomotives, ships, cars, or airplanes. We put the cost of our whole system of government and standard of living into everything we make and try to sell, and when something goes wrong with that system, business and alltogether too many Republicans and conservatives put all the blame on the most reliable consumer of the produce of that system.

The idea of free trade is that the trade of goods is unregulated by the government.

It doesn’t, however, have anything to do with using the lack of gov’t regulation in business and trade to keep money in my pocket. That’s capitalism (which is also a conservative principle, btw).

Some years ago we were refitting one of our State ferries using federal funds. Somebody either set out the wrong specs or took the wrong bribe and got some stainless steel modular shower/vanity/toilet units that didn’t have the right percentage of American steel in them. Somebody didn’t get the right bribe and ratted it out to the federal inspectors disallowed all the costs associated with them.