Scott Lincicome: In Defense of Free Trade

 

Scott Lincicome is a leading international trade attorney, adjunct scholar at the Cato Institute, and senior visiting lecturer at Duke University. In this Conversation, Lincicome explains the system of free trade agreements and alliances that the U.S. has built over many decades and how the system contributes to peace and prosperity for America. Lincicome also shares his perspective on the renegotiation of NAFTA, the decision not to participate in the Trans-Pacific Partnership (TPP), and other trade agreements. Finally, Kristol and Lincicome consider where Republicans and Democrats stand on trade today—and where the parties are likely to go in the future.

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  1. RufusRJones Member
    RufusRJones
    @RufusRJones

    I really don’t get how this is going to work out if the Fed is going to keep inflating the CPI, home prices, and commercial real estate not to mention stocks. Trade and robots lower prices except we can’t have that due to a government and financial system that requires inflation. So some poor (colloquialisms) have to lose their jobs. 

    Harald Malmgren says the new Fed chairman is going to force congress to learn about this stuff the hard way. 

    Don’t get run over. 

    • #1
  2. I Walton Member
    I Walton
    @IWalton

    RufusRJones (View Comment):

    I really don’t get how this is going to work out if the Fed is going to keep inflating the CPI, home prices, and commercial real estate not to mention stocks. Trade and robots lower prices except we can’t have that due to a government and financial system that requires inflation. So some poor (colloquialisms) have to lose their jobs.

    Harald Malmgren says the new Fed chairman is going to force congress to learn about this stuff the hard way.

    Don’t get run over.

    Isn’t Trump complaining that the Fed is raising interest rates not inflating?

    • #2
  3. Bob Thompson Member
    Bob Thompson
    @BobThompson

    I Walton (View Comment):

    RufusRJones (View Comment):

    I really don’t get how this is going to work out if the Fed is going to keep inflating the CPI, home prices, and commercial real estate not to mention stocks. Trade and robots lower prices except we can’t have that due to a government and financial system that requires inflation. So some poor (colloquialisms) have to lose their jobs.

    Harald Malmgren says the new Fed chairman is going to force congress to learn about this stuff the hard way.

    Don’t get run over.

    Isn’t Trump complaining that the Fed is raising interest rates not inflating?

    I remember high interest rates and high inflation.

    • #3
  4. I Walton Member
    I Walton
    @IWalton

    This is a worthwhile discussion as nothing could be more damaging to our economy and freedom than to lose our basic bias in favor of freer trade.  He’s good.

    That is not to say that we do not need new packages of policies, including fewer of them,  to foster adjustments to trade, technology and demographic shocks and to deal with other counties’ aggressive targeted trade policies but their bias must remain  freer trade under the rule of law..

    • #4
  5. RufusRJones Member
    RufusRJones
    @RufusRJones

    Progress = better living through purchasing power = deflation 

    …except we have too much debt for that. 

    …and the Ruling Class can’t tax increases in purchasing power, even though 90% of us will live better. 

    • #5
  6. RufusRJones Member
    RufusRJones
    @RufusRJones

    Kristol likes big government. It needs taxes.

    • #6
  7. I Walton Member
    I Walton
    @IWalton

    Bob Thompson (View Comment):

    I Walton (View Comment):

    RufusRJones (View Comment):

    I really don’t get how this is going to work out if the Fed is going to keep inflating the CPI, home prices, and commercial real estate not to mention stocks. Trade and robots lower prices except we can’t have that due to a government and financial system that requires inflation. So some poor (colloquialisms) have to lose their jobs.

    Harald Malmgren says the new Fed chairman is going to force congress to learn about this stuff the hard way.

    Don’t get run over.

    Isn’t Trump complaining that the Fed is raising interest rates not inflating?

    I remember high interest rates and high inflation.

    Yes first comes inflation caused by expanded money, then comes high interest rates caused by restrictions on money supply and it takes a while to squeeze out the inflation.    We’ve had over eight years of easy money to finance Obama’s spending, now with a growing economy that money base is going to turn in to money and the Fed should be restraining the money supply or the government should be restraining its spending or better yet, both.  We had robust growth under Reagan with deficits and continued tight money so I really don’t worry about tight money and high interest rates.  Interest rates allocate savings which in our country are in short supply causing us to borrow abroad.

    • #7
  8. CarolJoy Coolidge
    CarolJoy
    @CarolJoy

    In my view, we can have “free trade” agreements or you can have a vibrant middle class, but you cannot have both.

    • #8
  9. CarolJoy Coolidge
    CarolJoy
    @CarolJoy

    I Walton (View Comment):

    RufusRJones (View Comment):

    I really don’t get how this is going to work out if the Fed is going to keep inflating the CPI, home prices, and commercial real estate not to mention stocks. Trade and robots lower prices except we can’t have that due to a government and financial system that requires inflation. So some poor (colloquialisms) have to lose their jobs.

    Harald Malmgren says the new Fed chairman is going to force congress to learn about this stuff the hard way.

    Don’t get run over.

    Isn’t Trump complaining that the Fed is raising interest rates not inflating?

    Trump is not a friend of the Fed, and he would love to see it go away. Which means he is probably considering a way to manipulate it out of existence.

    • #9
  10. Bob Thompson Member
    Bob Thompson
    @BobThompson

    CarolJoy (View Comment):

    I Walton (View Comment):

    RufusRJones (View Comment):

    I really don’t get how this is going to work out if the Fed is going to keep inflating the CPI, home prices, and commercial real estate not to mention stocks. Trade and robots lower prices except we can’t have that due to a government and financial system that requires inflation. So some poor (colloquialisms) have to lose their jobs.

    Harald Malmgren says the new Fed chairman is going to force congress to learn about this stuff the hard way.

    Don’t get run over.

    Isn’t Trump complaining that the Fed is raising interest rates not inflating?

    Trump is not a friend of the Fed, and he would love to see it go away. Which means he is probably considering a way to manipulate it out of existence.

    Well, I would like to see that. I don’t consider the Fed an essential element for governing America. Looks more like a facilitator of banking misconduct to me.

    • #10
  11. Bob Thompson Member
    Bob Thompson
    @BobThompson

    CarolJoy (View Comment):

    In my view, we can have “free trade” agreements or you can have a vibrant middle class, but you cannot have both.

    How does having ‘free trade’ agreements differ from having free trade?  Why would one need an agreement to have free trade?

    • #11
  12. RufusRJones Member
    RufusRJones
    @RufusRJones

    Trump likes inflation. Anyone that is levered up or benefits from taxes wants inflation. 

    • #12
  13. Bob Thompson Member
    Bob Thompson
    @BobThompson

    RufusRJones (View Comment):

    Trump likes inflation. Anyone that is levered up or benefits from taxes wants inflation.

    I see that, but what does he then do and say about his supposed positions supporting American workers?

    • #13
  14. RufusRJones Member
    RufusRJones
    @RufusRJones

    Bob Thompson (View Comment):

    RufusRJones (View Comment):

    Trump likes inflation. Anyone that is levered up or benefits from taxes wants inflation.

    I see that, but what does he then do and say about his supposed positions supporting American workers?

    I think the problem is so many people want government graft or government largess and nobody really thinks about productivity anymore. Trump is a developer so he likes low interest rates. He likes things to be inflated. I don’t know how or you can generally explain to people that we need to worry about productivity everywhere, all the time. Trump is not the one to explain it anyway. He fights the media. He fights the cultural Marxists. He gets some conservative things done. So far so good.

    • #14
  15. RufusRJones Member
    RufusRJones
    @RufusRJones

    I just want to say for the record, I’m not very smart; I’m just obsessed with some things. 

    • #15
  16. CarolJoy Coolidge
    CarolJoy
    @CarolJoy

    Bob Thompson (View Comment):

    SNIP

    How does having ‘free trade’ agreements differ from having free trade? Why would one need an agreement to have free trade?

    A free trade agreement would more appropriately be called a “Free Trade Act.” However an act of Congress must receive approval of 66% of the members of that legislative body. An agreement only needs a simple majority. So for decades people in power have managed to have what should require 66% of Congress to only require 51% of Congress.

    Anyway the current state of free trade agreements is such that they strip our citizens of having sovereignty. To explain this I’d need to be familiar with all gazillion pages of NAFTA. I can offer up one example. In 1999, the state of Calif overturned its own mandate that gasoline would  contain MTBE by 9% of its volume. The reason for this ban  was  how the Blue Ribbon Panel on MTBE  that MTBE was a major and serious toxin and was more than likely a carcinogen.

    So immediately the state of Calif was sued by the Canadian MTBE firm to the tune of over 700 mil dollars. This was  due to how under NAFTA it was not possible to opt out of a contract when the contract’s enforcement ensured serious injury and harm to people.  Normal tort law would allow for pulling out of a contract for those reasons. So our state had to pay some amount close a billion dollars for not buying a product.

    So again, “free trade” agreements are all about preserving any and all items that occur through the decisions of a small panel of people, who are unelected, who care not a bit about normal tort law, or human health or such things as the right of a nation to preserve sensible  immigration regulations/national borders. Investors love “free trade”  – what is not to love by the Investment Class  about Oscar Meyer, for instance, sending meat packing operations to Mexico, where worker’s make 14% of what people here make? Meanwhile Oscar Meyer still charges Americans the same amount for their products.

    People on the Left are up in arms over how Trump’s actions will open the various wilderness areas up to drilling and fracking. But had Hillary been President, the same thing would have occurred.

    Except the details would be greatly different. Under Trump, the fact remains Americans have the newly created jobs. Under HRC, the Trans Pacific Plan would have  gotten approval in Congress, and then we would have mining and fracking activities going on inside our nation’s wilderness areas, while Malayasians or Chinese or whoever the hell paid the Clintons the “donations” to the Clinton Foundation would be handling  those operations, and the workers would not be  American. Of course, Hillary would be wringing her pretty little hands saying “I had nothing to do with this! I am disgusted by it.” Yet she’d have those lovely donations to her and Bill’s Charity.

    • #16
  17. CarolJoy Coolidge
    CarolJoy
    @CarolJoy

    Bob Thompson (View Comment):

    RufusRJones (View Comment):

    Trump likes inflation. Anyone that is levered up or benefits from taxes wants inflation.

    I see that, but what does he then do and say about his supposed positions supporting American workers?

    The fact that we now have Americans working full tilt inside our energy companies is a huge example of what is going on and how it is good for the American citizen who like working at a good paying job. This is why he is loved by those in the fly over states.

    • #17
  18. cdor Member
    cdor
    @cdor

    I Walton (View Comment):

    Bob Thompson (View Comment):

    I Walton (View Comment):

    RufusRJones (View Comment):

    I really don’t get how this is going to work out if the Fed is going to keep inflating the CPI, home prices, and commercial real estate not to mention stocks. Trade and robots lower prices except we can’t have that due to a government and financial system that requires inflation. So some poor (colloquialisms) have to lose their jobs.

    Harald Malmgren says the new Fed chairman is going to force congress to learn about this stuff the hard way.

    Don’t get run over.

    Isn’t Trump complaining that the Fed is raising interest rates not inflating?

    I remember high interest rates and high inflation.

    Yes first comes inflation caused by expanded money, then comes high interest rates caused by restrictions on money supply and it takes a while to squeeze out the inflation. We’ve had over eight years of easy money to finance Obama’s spending, now with a growing economy that money base is going to turn in to money and the Fed should be restraining the money supply or the government should be restraining its spending or better yet, both. We had robust growth under Reagan with deficits and continued tight money so I really don’t worry about tight money and high interest rates. Interest rates allocate savings which in our country are in short supply causing us to borrow abroad.

    Interest rates have been essentially 0 for a number of years. That is crazy. It forces people into more aggressive actions with their savings that could end up in disaster. There is room for rates to increase even further, but I understand Trump’s impatience with the Fed . He doesn’t want any downward pressure on economic growth. But our country has grown for centuries with interest rates between 3 and 6 percent prime. 

    As  far as trade is concerned, I love @bobthompson question. If trade is truly free, why does there need to be a multiple thousand page agreement? Because, of course, the devil is always in the details.

    • #18
  19. Bob Thompson Member
    Bob Thompson
    @BobThompson

    CarolJoy (View Comment):

    Bob Thompson (View Comment):

    RufusRJones (View Comment):

    Trump likes inflation. Anyone that is levered up or benefits from taxes wants inflation.

    I see that, but what does he then do and say about his supposed positions supporting American workers?

    The fact that we now have Americans working full tilt inside our energy companies is a huge example of what is going on and how it is good for the American citizen who like working at a good paying job. This is why he is loved by those in the fly over states.

    I see that is where we are now. What I’m asking is what does Trump do when we get several more points of inflation to where these workers are feeling the effects and they want wage increases and the employers balk? What’s Trump’s stance then. By the way, I just soon see a straight market effect on interest rates and maybe some deflation with insistence on real productivity without using ‘pretend work’ to keep people occupied. But I’m not very smart either.

    • #19
  20. RufusRJones Member
    RufusRJones
    @RufusRJones

    It’s more about asset bubbles than CPI inflation right now.

    • #20
  21. CarolJoy Coolidge
    CarolJoy
    @CarolJoy

    Bob Thompson (View Comment):

    CarolJoy (View Comment):

    Bob Thompson (View Comment):

    RufusRJones (View Comment):

    Trump likes inflation. Anyone that is levered up or benefits from taxes wants inflation.

    I see that, but what does he then do and say about his supposed positions supporting American workers?

    The fact that we now have Americans working full tilt inside our energy companies is a huge example of what is going on and how it is good for the American citizen who like working at a good paying job. This is why he is loved by those in the fly over states.

    I see that is where we are now. What I’m asking is what does Trump do when we get several more points of inflation to where these workers are feeling the effects and they want wage increases and the employers balk? What’s Trump’s stance then. By the way, I just soon see a straight market effect on interest rates and maybe some deflation with insistence on real productivity without using ‘pretend work’ to keep people occupied. But I’m not very smart either.

    The coming AI revolution is quite likely to eliminate many jobs and we will see more depression than inflation. One billion  jobs globally will be affected by robotics that remove  people from the work force.  250 million people who will no longer be working delivery jobs. No page checks, no spending. So an  inflationary period  would be a very temporary thing, and it would probably be viewed by people in the mid 2020’s as “the good old days.”

    • #21
  22. RufusRJones Member
    RufusRJones
    @RufusRJones

    Globalized trade, robots, automation, artificial intelligence etc. are no big deal if you have a deflationary financial system, like we had before the Fed. 

    • #22
  23. Mark Camp Member
    Mark Camp
    @MarkCamp

    CarolJoy (View Comment):
    The coming AI revolution is quite likely to eliminate many jobs

    The underlying assumption of this statement is that the economy grows because of government “creating jobs” and preventing the “elimination of jobs”. We are taught never to ask what exactly “creating jobs” is or why it is necessarily good for us, regardless of what value the workers are actually producing, per day at their generic “jobs”.

    This fantastic view of the economy is today the favorite brainwashing fluid of those who seek to move America always farther away from the capitalist end of the spectrum of economic freedom, and closer to the “socialist” end: complete state control of human economic life, whether it be called communism, socialism, fascism, or some other euphemism.

    To see how absurd this concept of the economy is, consider that virtually all of the “jobs” of America 200 years ago have been “eliminated” and we are 50 times richer. Or consider the countries were everyone has a job, for example, Maoist China, the USSR, and North Korea.  All experienced mass starvation, even though no “jobs were eliminated” and “jobs were created for all”, thanks to state control of the economy.

    Those “eliminated jobs” in America of the past were NEVER the ultimate prize of human labor and sacrifice–in fact, they were mostly hard, dirty, and dangerous, and we are all deeply grateful that we are rid of them. Eliminating all of the jobs was the cause of our present riches.

    What do economists offer you as an alternative explanation of the economy, if they are to convince you to give up the bill of goods you’ve been sold called “creating jobs”?

    It is that human beings act in order to pursue the satisfaction of their wants, something which they know better how to do than any progressivist politician and his “job-creating, job-protecting” central planners ever can.

    From economics and from history, we learn  that the wealth of nations grows as their capital structure grows, and that that is the only way it can or ever has.

    The growth of the capital structure leads directly not to higher and higher unemployment, but to higher and higher labor and resource productivity!  That’s why the average citizen in a relatively capitalist society keeps getting richer and richer, even though he keeps working less and less, and under more and more safe and pleasant conditions.

    The middle class is not the creation of creeping state control over human labor and property, but the creation of capitalism.  It is in fact anti-capitalist statism, not capitalism, that is hurting the middle class in America, and statism will eventually wipe out the middle class altogether if we don’t stop enabling it by worshiping at the altar of “jobs”.

    • #23
  24. RufusRJones Member
    RufusRJones
    @RufusRJones

    The issue isn’t what you make, it’s what you get and how much freedom you have. 

    Mark Camp (View Comment):

    From economics and from history, we learn that the wealth of nations grows as their capital structure grows, and that that is the only way it can or ever has.

    The growth of the capital structure leads directly not to higher and higher unemployment, but to higher and higher labor and resource productivity! That’s why the average citizen in a relatively capitalist society keeps getting richer and richer, even though he keeps working less and less, and under more and more safe and pleasant conditions.

    We’re Living in the Age of Capital Consumption

     

    Yet capital is distinct from money, it is a largely irreversible, definite structure, composed of heterogeneous elements which can be (loosely) described as goods, knowledge, context, human beings, talents and experience.

    Modern economics textbooks usually refer to capital with the letter “C”. This conceptual approach blurs the important fact that capital is not merely a single magnitude, an economic variable representing a magically self-replicating homogenous blob but a heterogeneous structure. Among the various economic schools of thought it is first and foremost the Austrian School of Economics, which stresses the heterogeneity of capital. Furthermore, Austrians have correctly recognized, that capital does not automatically grow or perpetuate itself. Capital must be actively created and maintained, through production, saving, and sensible investment.

    Through capital formation, one creates the potential means to boost productivity.

    At the same time, the all-encompassing redistributive welfare state, which either directly through taxes or indirectly through the monetary system continually shifts and reallocates large amounts of capital, manages to paper over the effects of capital consumption to some extent. It remains to be seen how much longer this can continue. Once the stock of capital is depleted, the awakening will be rude.

    Investment, Productivity, Wages, and Economic Prosperity

    But my column doesn’t just focus on investments in “physical capital.” I also argue that our current education system does a very poor job of boosting “human capital.”

     

    • #24
  25. RufusRJones Member
    RufusRJones
    @RufusRJones

    Labor, Capital, Entrepreneurship and Economic Growth

    In other words, labor and capital are the two ingredients that determine economic performance. But this conventional theory is incomplete. It usually overlooks the role of entrepreneurship.

    In simple terms, entrepreneurs are the chefs, the people who mix together the two ingredients of labor and capital.

    But this then raises an important question. Who are the entrepreneurs? Do we want politicians and bureaucrats in Washington to play that role? Even if we assume they are totally honest and non-corrupt, that seems to be the wrong answer. When politicians try to allocate labor and capital, we get policies like Solyndra. We get Fannie Mae and Freddie Mac. We get TARP, the minimum wage law, and a 72,000-page tax system.

    And unlike the private sector, there’s no virtuous feedback. Indeed, failure often results in more resources getting diverted in an effort to compensate for the original failure. Sort of Mitchell’s Law on steroids.

    When chefs are from the private sector, by contrast, there is a bottom-line incentive to allocate labor and capital in ways that increase economic output. This doesn’t mean entrepreneurs are always right. Markets are a never-ending learning process.

    But when private entrepreneurs hit upon a good recipe, they are rewarded by consumers, which means that both labor and capital get good results – meaning higher wages for workers and profits for investors.

    • #25
  26. I Walton Member
    I Walton
    @IWalton

    Bob Thompson (View Comment):

    CarolJoy (View Comment):

    In my view, we can have “free trade” agreements or you can have a vibrant middle class, but you cannot have both.

    How does having ‘free trade’ agreements differ from having free trade? Why would one need an agreement to have free trade?

    As he says, I think correctly, we have neighbors with whom there are deeper longer and more rapidly changing trade and we want to go beyond WTO rules.  However, there is more to it than that.  In the case of Mexico Senator Brock,  Reagan’s USTR, gave a speech to threaten the Europeans who were intransigent on agricultural subsidies and exports, saying we’d just go into separate trading arrangements if they didn’t budge.  The Mexican president at the time jumped on the speech because he wanted to use the opportunity to join with the US and Canada in a trade agreement to help him deregulate his economy and open it up.  So that trade deal was in part an accident.  We entered trade deals with Japan because they use methods of discrimination that cannot be got at through the WTO or tariff reductions, there tariffs were lower then ours.

    I’m not a fan of deals because we’re not very good at it, always concentrate on big old companies who have organized lobbies in Washington and can’t protect emerging new technologies because we are the leaders.

    We have problems with trade that are wholly domestic which we can deal with but don’t.  We have problems abroad with aggressive traders like China most of which we can’t deal with intelligently, but which would be ameliorated if we dealt with our own problems.

    The middle class issue Joy raises is curious.  I don’t see the connection.

    • #26
  27. CarolJoy Coolidge
    CarolJoy
    @CarolJoy

    I Walton (View Comment):

    Bob Thompson (View Comment):

    CarolJoy (View Comment):

    In my view, we can have “free trade” agreements or you can have a vibrant middle class, but you cannot have both.

    How does having ‘free trade’ agreements differ from having free trade? Why would one need an agreement to have free trade?

    As he says SNIP In the case of Mexico Senator Brock, Reagan’s USTR, gave a speech to threaten the Europeans who were intransigent on agricultural subsidies and exports, saying we’d just go into separate trading arrangementsSNIP. The Mexican president …jumped on the speech because he wanted to use the opportunity to join with the US and Canada in a trade agreement to help him deregulate his economy and open it up. So that trade deal was in part an accident. WeSNIP with Japan because they use methods of discrimination that cannot be got at through the WTO or tariff reductions, there tariffs were lower then ours.

    I’m not a fan of deals because we’re not very good at it, always concentrate on big old companies who have organized lobbies in Washington and can’t protect emerging new technologies because we are the leaders.

    SNIP

    The middle class issue Joy raises is curious. I don’t see the connection.

    When Ross Perot ran in 1992, he stated when NAFTA became law, there would be a giant sucking sound in terms of jobs. Most in the media made fun of him. But trade agreements like NAFTA guaranteed the cheapest products, which proponents of the bastardized version of Milton Friedman’s supply side economic message were determined to bring about. Bill Clinton was one such proponent.

    At various points after NAFTA, we had a deficit with many nations due to trade agreements. Also jobs we Americans once held were now held by people south of the border and in places like Bangladesh. Those jobs included many related to designing & building cars, & also the manufacture of car parts.

    In the 1950’s and  60’s, I grew up in south side Chicago. My cousin Ken, some 20 years older than me, he raised his family and belonged to a country club all on the wages he made at US Steel in Gary Indiana. I had several male friends who made enough to pay outright their college tuition by working at the mills during summers.

    The mills paid $ 17 dollars an hour.  A new home cost $ 22 thousand.

    Now jobs for college aged kids in the summer pay $ 8 an hour. The job  market is such that many will never get jobs with the degrees they will eventually hold, degrees representing tens of thousands of $$s of loans.

    NAFTA architects knew one result would be immigrants moving from the south to the north while America’s middle class was further decimated. Pat Buchanan was labeled a racist simply for trying to educate us on what was happening: http://www.ontheissues.org/Celeb/Pat_Buchanan_Free_Trade.htm

    • #27
  28. RufusRJones Member
    RufusRJones
    @RufusRJones

    CarolJoy (View Comment):
    When Ross Perot ran in 1992, he stated when NAFTA became law, there would be a giant sucking sound in terms of jobs.

    My peeps say that the Fed goosing the economy between 1996 and 2008 forced the jobs overseas and in return they bought all of our treasury debt and mortgage securities.

    • #28
  29. CarolJoy Coolidge
    CarolJoy
    @CarolJoy

    Mark Camp (View Comment):

    CarolJoy (View Comment):
    The coming AI revolution is quite likely to eliminate many jobs

    SNIP We are taught never to ask what exactly “creating jobs” is or why it is necessarily good for us, regardless of what value the workers are actually producing, per day at their generic “jobs”.

    This fantastic view of the economy is today the favorite brainwashing fluid SNIP

    To see how absurd this concept of the economy is, consider that virtually all of the “jobs” of America 200 years ago have been “eliminated” and we are 50 times richer. Or consider the countries were everyone has a job, for example, Maoist China, the USSR, & No Korea. All experienced mass starvation, even though no “jobs were eliminated” SNIP

    SNIP

    The middle class is not the creation of creeping state control over human labor and property, but the creation of capitalism. SNIP

    I believe the truth lies somewhere in the middle. Some of what you state is true, but the flip side has its points as well.

    And it is the people who lost jobs who put Trump in the WH. Something I don’t think he is likely to forget:

     

    https://www.realclearpolitics.com/articles/2016/06/09/nafta_and_the_angry_middle-class_voter_130832.html

                           SPECIAL SERIES:
                           Middle Class Pain
    NAFTA and the Angry Middle-Class Voter
    By Carl M. Cannon
    RCP Staff
    June 09, 2016

    The second in a five-part RCP series on middle-class issues shaping the 2016 election. SNIP

    On a bleak February day, in plenty of time to impact the 2016 Indiana presidential primary, a flush U.S. corporation named United Technologies abruptly announced that it would be closing two Indiana manufacturing plants employing some 2,100 Americans — and shifting the plants’ operations to Mexico.

    The news, delivered by United Technologies’ Carrier division President Christopher Nelson, took workers in two impacted cities, Indianapolis and Huntington, by surprise. It shocked Indianan politicians of both parties who’d helped secure tax breaks for the Connecticut-based conglomerate. Both plants were highly profitable, as are Carrier and United Technologies, the latter of which reaps huge annual profits from government contracts.

    When distraught workers voiced expressions of betrayal, Nelson told them to “quiet down” so he could finish talking. “I want to be clear,” he added. “This is strictly a business decision.” It was an odd thing to tell people losing their livelihoods. Obviously, this was a business decision—what else could it be? Yet to employees it was quite personal, especially in Huntington, where the plant’s relocation threatened not only families but an entire town.
    SNIP
    Powerless to change executives’ minds, aggrieved Hoosiers turned for solutions to Bernie Sanders & Donald Trump, two presidential candidates who relentlessly campaigned against NAFTA—and who made a point of denouncing United Technologies by name.

    Partly on the strength of this stance, both insurgent candidates upended their party’s establishment in Ind’s May 3 primary. Sanders’ win kept him going another 5 weeks. Trump’s drove the last remaining Republican challengers from the field.

    • #29
  30. CarolJoy Coolidge
    CarolJoy
    @CarolJoy

    Mark Camp (View Comment):

    CarolJoy (View Comment):
    The coming AI revolution is quite likely to eliminate many jobs

    The underlying assumption of this statement is that the economy grows because of government “creating jobs” and preventing the “elimination of jobs”. We are taught never to ask what exactly “creating jobs” is or why it is necessarily good for us, regardless of what value the workers are actually producing, per day at their generic “jobs”.

    This fantastic view of the economy is today the favorite brainwashing fluid of those who seek to move America always farther away from the capitalist end of the spectrum of economic freedom, and closer to the “socialist” end: complete state control of human economic life, whether it be called communism, socialism, fascism, or some other euphemism.

    To see how absurd this concept of the economy is, consider that virtually all of the “jobs” of America 200 years ago have been “eliminated” and we are 50 times richer. Or consider the countries were everyone has a job, for example, Maoist China, the USSR, and North Korea. All experienced mass starvation, even though no “jobs were eliminated” and “jobs were created for all”, thanks to state control of the economy.

    Those “eliminated jobs” in America of the past were NEVER the ultimate prize of human labor and sacrifice–in fact, they were mostly hard, dirty, and dangerous, and we are all deeply grateful that we are rid of them. Eliminating all of the jobs was the cause of our present riches.

    What do economists offer you as an alternative explanation of the economy, if they are to convince you to give up the bill of goods you’ve been sold called “creating jobs”?

    It is that human beings act in order to pursue the satisfaction of their wants, something which they know better how to do than any progressivist politician and his “job-creating, job-protecting” central planners ever can.

    SNIP

    Also it is important to note that the development of the AI self driving cars and self flying drones that will upend the delivery system is totally enabled by huge amounts of capital given to those people  starting the enterprise.

    Those companies bringing the AI revolution about have a capitalization factor that the rest of industry must be drooling over.

     

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