Bush Supports Shift of Jobs Overseas

Except we know what happens when the government intervenes to protect an industry from the horrors of free trade: farmers get paid not to grow corn.
Life is tough, and the nanny state can’t protect you from everything.

My government was cut out of a free trade agreement with the US because they refused to lend military support in Iraq. Why can’t the US government just go ahead and free up overseas trade overnight? You know, make free trade actually free trade?
Is it because doing that would have disastrous short term consequences for many people, and that sort of broad change should be eased into existence? Partly. Greed also. Hypocrisy also.

Anyone who wanted Kyle’s mythical program squashed, roll back that analogy any amount of years you’d like and see how great things turn out. Worker productivity increasing is bad? God, every time I think, “leftists are rational individuals who simply believe in different policies than I feel are optimal” you guys go and advocate Brave New World. Gah.

Who are you talking to? The imaginary people who just called you a baby-eating fascist? That’ll learn 'em.

Super-ironically, we grow food so cheap we make sure all farming in Africa is doomed to failure.

Good post, but makes me wonder: if the government provides extensive retraining opportunity, and the workers won’t take it (for whatever reason), is the government’s obligation fulfilled at that point? Even if 90% of the workers refuse to retrain? IOW, is the government obligated to provide displaced workers with the opportunity to adjust and continue to lead productive lives, or is it obligated to make sure that they in fact adjust and lead productive lives? If the latter, how could that possibly be accomplished with a worker who says “No. I will only work in my old job, nothing else”? If workers know that the government must make sure they in fact adjust, won’t workers be encouraged to be stubborn?

My personal feeling–which will probably come as no surprise to anyone who knows me–is that the government should provide the opportunity to adjust. I completely agree with Kyle: changes to the economy are necessary. If we refused to allow any change that put large numbers of people out of business, we’d have no cheap farming, we’d have no cars (sayonnara, horse industry), no airplanes (goodbye passenger trains–wait, there wouldn’t have been trains, because the stagecoach folks wouldn’t have allowed it), etc. It’s ridiculous to argue that if Kyle’s hypothetical AI had been invented, the government should “quash” it because it threatens the jobs of programmers. Similarly, if it’s more efficient to have programming done overseas, the government shouldn’t quash that either. Not only is it morally wrong, it won’t work because the rest of the world is too smart and too hungry for development–they’d just leave us in the dust.

And a strict libertarian would say “Too bad for those workers; you could have foreseen the problem and retrained earlier, or purchased private insurance or saved money to cushion against unforeseen events. If you’ve been getting paid more than someone else who would have done the same work, you should be glad you got overpaid for all those years and move on, rather than expecting to get overpaid for the rest of your life.” I don’t believe that. I think a responsible, reasonable government will provide assistance during large-scale economic shifts like this one. But that assistance need only be an opportunity to retrain. It doesn’t have to put you in the same job you had. It doesn’t have to mean there will be no financial hardship on you. Your industry is changing; that’s going to involve some financial pain. Lots of people go through job problems that are not their fault and totally out of their control, and you’re no more or less blameworthy than those people just because your job problems are part of an industrywide phenomenon. You’re smart folks and will be able to find other productive things to do if you want to. The government should help get you over the hump, short-term, preferably by providing money since you will be more likely to find efficient training with it than the government will if they administered a training program.

Which is basically what unemployement is, but my impression (never having been on it) is that it’s insufficient for retraining–that it will let you just scrape by on bills for a few months, but isn’t enough to also pay for retraining. So I guess I’m thinking about essentially a boost in unemployement benefits, short-term (next few years), for certain industries. Would that work? I realize it’d be a bitch to decide what industries qualify, and then to decide who does or doesn’t work in those industries. Maybe it would be more efficient to just boost the whole system short-term?

Other minor points: Dan, why is it better to dole out money over time (a system you say is good) rather than in a lump sum (a system you say is bad)?

Why is GWB saying this during an election year? I think he’s right and it’s a gutsy thing to say (although I don’t know whether he’s saying it because it needs to be said, or for some other reason). But it seems like shooting yourself in the foot when you’re facing reelection and the economy’s in a tough spot. Kerry is already all over him for this. What up?

Super-ironically, we grow food so cheap we make sure all farming in Africa is doomed to failure.[/quote]
If that’s true, it’s because we can sell them food cheaper than they can grow it themselves. How is that bad? They can buy our food and take the leftover money they would have spent growing it to spend on something else. I don’t see how that could possibly hurt anybody.

There’s no real difference, except that ag subsidies buffer against intranational competition. It’s the same idea though, wouldn’t you agree?

Not quite. Our government spends tax revenue to subsidize the production of food. That enables the food to be sold at below market prices. For an embarrassingly bad website on the subject, see http://www.subsidieskill.org.

To make matters worse, our food aid programs are really driven more by lobbyists at ADM, eager to get the government to buy their surpluses, than they are by genuine need in Africa. So the government buys excess American produce, sends it to whatever African country seems “needy”, and thereby destroys African self-sufficiency, screws American taxpayers, and turns American farmers into whores. It’s a sad scene.

Some very interesting points here. Where were all of you in this thread

http://www.quartertothree.com/phpBB2/viewtopic.php?t=8311

which was raging last week? :) I’m not going to repeat everything that was said in that thread here, but it’s worth a read if you haven’t previously checked it out.

Life is easier when you characterize the opposition as irrational maniacs, ain’t it Ben?

So far, we haven’t had any out-and-out calls for squashing Kyle’s program. The closest we came is that I said that if the program affected enough people and the government wouldn’t do anything to help those displaced, then we should squash it. However, in the real world, any government worth its salt would have to help the displaced workers if enough of them were created; lest it gets voted out of office. (I created the logical choice just for completeness sake… it’s much better for the government to deal, somehow, than to just kill innovation.) Bush’s government is the only one I’ve heard of that wasn’t a third world dictatorship that both refuses to protect domestic industries and tells displaced workers “Fuck you”. That’s not courage… that’s cowardice. Courage would be turning to his corporate employers and telling them that they’ll have to somehow help their laid off workers.

[edit] Dave- I read that thread while it was happening… it was a nifty thread. It’s largely because of the arguments presented in it that I’m in favor of limited protectionism.

There’s no real difference, except that ag subsidies buffer against intranational competition. It’s the same idea though, wouldn’t you agree?[/quote]

Well, I’ve never seen an economist say that the only thing keeping Americans in the food business is subsidies.

I don’t think the two are comparable.

  1. Other countries have a strong comparitive advantage in manufacturing. The US can keep the jobs from moving through heavy subsidies and trade barriers, but this makes everyone significantly poorer, especially third-worlders, as the price is above what it would be, and the barriers drive a efficiency wedge between buyer and seller prices. No one disagrees about this, though people worry about the impact of the short-run US job loss in varying amounts.

Everyone who buys food or pays taxes loses, while manufacturing jobs gain.

  1. The US is probably at or above the comparitive advantage of anyone else in certain types of food production - soybeans, wheat, and so on. If we didn’t subisidize them, the jobs wouldn’t move. We subsidize them anyway, but this only results in the US losing money; everyone else gets a chunk of the subsidy when they buy from us. This is because the subsidy results in prices lower than they could ever be otherwise.

Everyone who buys or produces food wins, while those who pay taxes lose.

Oh, one of the things I’ve never been able to get the hard core anti-trade people to explain to me is why they’re opposed to our ag subsidies; can’t they theoretically just freeload off our stupidity? The only explanations I’ve seen from the third-worlders themselves have used the arguments you’d expect to hear from first-worlders complaining about keeping their ag jobs. What, the third-world wants to be a low-productivity breadbasket? Totally confuses me.

Well, productive low-level agriculture could, in theory, be a stepping stone to industry. There’s sort of an argument there. With a tax base of productive farmers and whatnot progress could occur.

Ag subsidies buffer against other farmers, because they all got too good at their jobs and they lobbied so that everyone else gives them money so they can keep the job they want.

Anax- Well, you are the opposition, right? There isn’t a situation where the government should quash the program. Nope. Never. What was the last worker productivity increasing innovation that should’ve been quashed? Keep in mind, unemployment benefits and job market diversity are probably at or near all-time highs right now. Cowardice is being so afraid of getting voted out of office you don’t do what’s in the best interests of the nation.

I wonder how much of the outrage over this is because instead of a job being done by a machine the job is being given to some mudperson on the other side of world who makes half as much.

Ben, are you even reading the same thread we are? Also, congratulations on calling us all racists.

Nativists, actually, but instead of being afraid that some Irish guy will come here and steal your job you’re afraid that some Indian guy will steal your job from India.

Yo Ben, it’s cuz the Indians will work for peanuts. Or rice. Anyway, they are much cheaper than Irish bastids. That said, several Irish bastids owe me a beer this evening at the pub.

Right, it’s just honest commentary about us being afraid of “mud people”, when no one has even mentioned anything about the foreigners taking the job until you brought it up.

Right, it’s just honest commentary about us being afraid of “mud people”, when no one has even mentioned anything about the foreigners taking the job until you brought it up.[/quote]

Damn you, mud people! Taking jobs away from good, red-blooded Americans!!! I hate you all!

Wow. You have completely missed what I was saying Ben. If you have a development that will cause the nation to hemorrhage jobs, it’s the government’s responsibility to help those displaced workers, assuming they’re at least a certain percentage of the workforce. (I don’t know what that exact percentage might be.) So if you think the government should never, ever squash that development, (or even interfere in any way, including trade barriers) then the government should always help those in need. It’s a simple either/or Ben… I was merely holding out the other option. (government interference in the development) If you think it’s always unacceptable, then the government should be helping out. Which it’s not. This isn’t rocket science, Ben.

You can disagree with what I just said, but please disagree with what I just said, not some wacky “Brave New World” (to use your term) version of it.

Anax- Brave New World is the title of a somewhat famous dystopian novel.

And you present the choice as squash invention or help displaced workers. The choice is help displaced workers or not help them, squashing the invention should not ever be considered.

But at least a certain percentage needs to lose their jobs before help? So I lose my job because my company folds, I don’t get help, but Joe Schmoe loses his job because of trade/innovation he should get help? That’s not a very consistent position.

Jason- I wasn’t meaning to imply racism, but anti-free trade is a profoundly retrograde view that shares a lot of rhetoric(as well as ideas) with anti-immigration and other such crazies. Which reminds me, did you really mean to reference the Luddites as not crazy?

I’m well aware what it is… and since no one was talking about a utopian world, it seemed like an inappropriate label… I merely continued to use it because it roughly describes how you were treating my position.

And you present the choice as squash invention or help displaced workers. The choice is help displaced workers or not help them, squashing the invention should not ever be considered.

You just hit the nail on the head. My choice is to help displaced workers or to squash the devlopment (trade or new invention)… not helping the displaced workers should not ever be considered.

But at least a certain percentage needs to lose their jobs before help? So I lose my job because my company folds, I don’t get help, but Joe Schmoe loses his job because of trade/innovation he should get help? That’s not a very consistent position.

Well, when you characterize it like that, of course it’s not a consistent position. But that’s not what is necessarily entailed by what I said. There should be a basic social (and financial) safety net in place for everyone. In addition to that, when a large enough segment of the population is hurting, that safety net will collapse under the extra pressure… so additional steps must be taken.

There are three choices:

  1. Restrict trade (including export of jobs). Everyone suffers slightly in terms of higher prices and a less efficient economy. The foreigners who would otherwise get well-paying white-collar jobs are condemned to lives of third-world misery.

  2. Allow trade, don’t help those who lose their jobs. Everyone benefits slightly from lower prices and a more efficient economy. A few Americans suffer because they lose their jobs.

  3. Allow trade, help those who lose their jobs. Everyone benefits slightly from lower prices and a more efficient economy. A few are unemployed, but cared for by some kind of social safety net.

We might differ on details, but I think that most posters here would agree that option 3 is the best all-around. I’m not sure what makes you prefer option 1 to option 2, though, except nationalism. Why is it worse to have workers out of jobs here, where there’s at least some safety net already, than India, where I suspect unemployment benefits are much less generous?

The big problem with your argument is that we’re not talking about “a few” Americans losing their jobs; we’re talking about millions. And your ideas about efficiency really amount to just laying people off and/or shipping their jobs elsewhere. I absolutely hate the word “efficiency” as it’s being used lately. It’s the same damn thing as “downsizing” was in the 90s, and it’s the most cowardly, misleading word making the rounds in the media right now.

The current job exporting situation is unique and will require a lot more than just offering retraining and other welfare-state options to cushion the blow of lost employment. This has nothing in common with the Arab and Japanese scares of the 70s and late 80s. What’s happening now has a very real possibility of changing the West in a fundamenal way, dramatically lowering the standard of living for everyone, because the arena has for the first time moved outside our borders. We’ve rushed way too quickly into a world without trade barriers. There are too many Second and Third World nations positioned to essentially demolish our economies with drastically lower labor costs. We should have moved much more slowly, both so there wouldn’t be such a dramatic impact on our workforces and so the economies of nations like India and China could more gradually be brought to an improved standard of living. Sudden shocks aren’t any good, to any nation.

Why is it worse to have people out of work here than in India? Ever heard of self-interest? All due respect to the people in India, but I’d like us to take care of things between our own borders before we start being so egalitarian as to export our jobs and standard of living across the Pacific. There has to be a better way to improve the world economy as a whole that isn’t so hard on us. As for the safety net thing you mention, how is that supposed to continue to function at the assumed better-than-India levels if high unemployment demolishes the tax base? How is the government supposed to pay for these benefits? Losing jobs like this affects everyone in the end, not just the “few” people you think will end up on the dole. That’s something you’ve really got to consider.

Anyhow, the one thing I haven’t read anywhere is how the current situation is eventually supposed to turn into a net gain for the West. Every now and again someone like Bush says this will all come out roses, but nobody is saying how this will happen. Personally, I don’t see how it could happen, with the weakening US dollar and Bush’s insane deficit.