Tag: trade

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Who is more arrogant and annoying, Donald Trump or Paul Krugman? A Hobbesian choice to be sure, but I’d say Krugman every time. Of course, the media would uniformly disagree, as can be seen in the reaction to Trump’s economic ideas, The bizarre optimism in Donald Trump’s theory of the economy. Like Krugman, much of what Trump talks […]

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Yet Another Theory of Trump

 

Here’s another theory of Trump. Well, it’s not really a theory, more just a set of disparate observations. I’ve broken it into chunks so you can tell me which parts you agree with, don’t agree with, and why:

  1. Trump means ratings. Trump means pageviews. Trump means advertiser sponsorship. The media (very much including Ricochet) deserves a large share of the blame for the Rise of Trump, in so far as it’s driven by relentless competition for profit. The media gave Trump a massive amount of free publicity, not realizing — because the media is part of a clueless elite — that Trump was not just an entertaining bonanza for ratings and a guaranteed-clickbait diversion, but a serious political candidate who spoke to and for a very significant number of their fellow Americans.
  2. The opening of the ownership of broadcast channels, cable, and satellite to private investors has changed our civic culture, and not for the better. It did not result in a competition to provide informative news coverage to a civic-minded public. It resulted in just what you’d expect: competition, period — and thus a race to the bottom for ratings. The result was the creation of a mass culture of empty commercialism and short attention spans unconnected to deeper spiritual, moral, or civic values. Shopping channels, infomercials, product placement, and reality TV gave rise to a population fascinated, even obsessed, with consumer brands, products, celebrities, and super-celebrities. The Rise of Trump or someone like Trump was, in this culture, inevitable.
  3. The Internet, likewise, failed to meet its potential as an instrument for communicating conservative political ideas, traditional and religious values, and democratic civic mores. Only media outlets with well-established brand names and an already-large audience, or huge financial resources, have been able to enter the Internet media market and draw the attention of the public in significant numbers. The profit model of major media and their portals (Facebook, Google) is based on selling goods. The audience is no longer captive — as it was in the time of newspapers and the broadcast cartel — and thus there’s ferocious competition to amuse it and keep it from switching to another channel or clicking on another site. The media has severely cut back on news reporting and analysis; what little reporting they do is often based on press releases from corporations and lobby groups, foreign and domestic. (The number of people who work in PR now vastly exceeds the number who work in investigative journalism.) There’s a massive focus on providing shows and websites that are immediately attractive to audiences and advertisers: sex, sports, violence, and comedy, rather than detailed and informative reports about complex trade negotiations, the budget, tax reform, or health care.
  4. Advertisers don’t, generally, like programs and websites with complexity and disturbing reporting that interferes with the “buying mood.” They seek programs, themes, and stories that lightly entertain and fit in with the spirit of the primary purpose of program: selling their products. (Thus people are far more likely to read about restaurants and vacation destinations abroad than elections or deeper geopolitical trends.)
  5. Western elites, political and economic, understood the fall of the Berlin Wall as a vindication of free-market capitalism. The victory was so complete and so overwhelming that regardless of evidence, this elite has blindly assumed free trade to be always and everywhere benevolent and even democratic (although exceptions are allowed when private firms need subsidies and bailouts). The mainstream media, which is part of this elite, internalized this ideology.
  6. The steady encroachment of marketing and advertising into every aspect of our lives displaced both religion and the political public sphere, replacing it with a shallow consumer culture unsuited to thoughtful, democratic participation. Increasingly, we live in a world of virtual communities built by advertisers and based on consumer demographics.
  7. Whereas once we lived in a world of physical communities, sharing a social life and common concerns with our fellow citizens — of all classes — increasingly we live in virtual communities that may superficially be political, but whose chief purpose is to buy and sell goods, not to create or service the public political sphere and a healthful democracy.
  8. This social sorting has been accompanied by geographic sorting: Increasingly, we literally have no idea how the other half lives. They don’t live in our neighborhood; they don’t watch the same television, and we don’t even talk to them on the Internet. In fact, we deliberately “unfriend” people who don’t share our view of the world. (This helps to account, for example, for the massive disjunct between the Ricochet primary and the real primary.)
  9. Non-stop entertainment (including sports) doesn’t just help to sell goods. It is, even if inadvertently, a vehicle for the transmission of the elite class’s political ideology, as well as the contemporary equivalent Roman circuses. It diverts the public from politics, reinforces the beliefs of the elite class, and creates political apathy — until the dam breaks.
  10. The public has nonetheless been aware that it has been working harder with stagnant or declining incomes; it has inadequate medical care at high cost, and education is the pathway to the elite class — but education is increasingly unaffordable, and the culture of our educational institutions increasingly bizarre. It knows that things are done in their name all over the world, often involving their sacrifice or that of their families, but not, seemingly, to their benefit. Few understand our foreign policy or its history, because the media provides almost no substantive information that would help them place any of it in context. Neither does our educational system. The media does not see providing this information as its key responsibility. Its key responsibility is to shareholders and advertisers.
  11. Case in point: NAFTA. Substantial American majorities opposed NAFTA. Only the elite favored it. But media editorials, news coverage, and “experts” overwhelmingly reflected elite preference. The “experts” repeatedly intoned that the benefits of NAFTA were obvious and understood by all qualified authorities, and that only demagogues and “special interests” were opposed to it. (The “special interests” who were the losers included lower middle-class white males.) The media dealt with the awkward fact that polls showed steady majority opposition to the agreement mainly by ignoring it or occasionally suggesting the public was uninformed and didn’t recognize its own interests.
  12. The lower-middle class, white men in particular, has been under siege in the United States for the past several decades, adversely affected by the deflationary policies of the 1980s, corporate downsizing, globalization, and the government’s support of, or indifference to, the damage being done to them. While this class experienced significantly diminished wages and benefits, more onerous working conditions, and greater insecurity, a “protected” elite in government, finance, tech, tenured academia, and the media failed even to notice this, no less consider its long-term political implications.
  13. Since the 1970s, the income of the top 1 percent of households has grown by 85 percent and the top 10 percent by 45 percent, but the bottom 60 percent lost ground. The income of the lowest 20 percent fell by 12.5 percent. Real hourly earnings among the working class fell 5 percent. This, along with the adverse trend of social indicators (morbidity and mortality, drug addiction, suicide) suggests that the welfare of the majority of the country declined in the age of globalization — a point that was unnoticed because of the abovementioned points: The elite class became ideologically ossified after the failure of the USSR, which they took as dispositive proof of the benevolence of free markets and their ability to lift all boats in their rising tides; moreover, the elite class mentally and geographically separated itself from the rest of the country, and thus literally did not see what was happening to it. The mainstream media, drawn from this class, barely noticed that only a minority had been the beneficiaries of global trade. It briefly noticed this issue during Pat Buchanan’s 1996 campaign, then forgot it again entirely.
  14. The media and professional politicians — the elite whom Peggy Noonan calls “protected” — thus failed to notice the discontent of the public. The elite domination of the media occurs so naturally that media news people, even when operating with complete integrity and goodwill, are able to convince themselves that they choose and interpret the news “objectively” and on the basis of professional news values. These constraints are so powerful, and built into the system in such a fundamental way, that they don’t see that they’re operating within them. Thus the media confused a public that had been lulled into apathy by cheap imported goods and cheap non-stop entertainment for a public that was, in the main, satisfied with politics as usual.
  15. As a result, the media both failed properly to report the sentiments of this public to policy makers and failed properly to report to this public with information it could use to guide its political decision-making. This public is now in full-scale revolt.

Do you agree with some, all, or none of the above? If so, why?

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Again, US Trade with China Has Been a Good Thing

 

RTX274C4_shanghai_china_trade-e1457381972406Scott Sumner offers an interesting response to the recent David Autor, David Dorn, and Gordon Hanson paper on the China trade shock, which show some areas exposed to this new competition never recovered:

First, even if China trade was bad for the US, it was almost certainly extremely good for China, which was a vastly poorer country in 1990. So I’m quite confident that economists are justified in supporting free trade. Whether they are justified in suggesting that Chinese trade is beneficial to the US is another question.

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Trump is a Nazi, Only More Elitist

 

trump-nazi-saluteOkay, I’ll admit: The headline here is clickbait.

But here’s a data point which I think proves Donald J. Trump — if, in fact, this needs proof — is blowing steam out of his pie-hole. (I’m not trying to dive into the Trump vs. GOPe argument. I’m just trying to help Rob run a business here. I want people to read this post, think about the data point I’m writing about, and then join Ricochet.)

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From ETWN News: [….] Last month, a new federal law was enacted to prohibit importation of goods made with forced labor into the U.S., a big boost in the fight against labor trafficking.Since the 1930 Tariff Act, which prohibited such importation, one clause exempted this prohibition for when “consumptive demand” required such goods be imported. […]

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India, Intellectual Property, and Innovation

 

Article72Our conversation about Martin Shkreli and Indian pharmaceuticals reminded me that I’ve been having a mental debate with myself for a while. Where better to air my confusion than Ricochet?

As I argued, the case for importing generic medications from India is open-and-shut. I strongly suspect our failure to permit this is more owed to pharma-company rent-seeking and protectionism than to concern for public safety. American consumers are discerning enough to make their own decisions about whether they trust drugs from overseas. If we allowed them to come into the country, rigorous and trustworthy private mechanisms for inspecting overseas drug manufacturing facilities would quickly emerge, just as they have for awarding Michelin stars to restaurants around the world.

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The Impact of “China Trade Shock” on US Workers

 

shutterstock_124001773This is a pretty good example of a trade-off in economic policymaking. From “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade” by David Autor, David Dorn, and Gordon Hanson (italics mine):

China’s economic growth has lifted hundreds of millions of individuals out of poverty. The resulting positive impacts on the material well-being of Chinese citizens are abundantly evident. Beijing’s seven ring roads, Shanghai’s sparkling skyline, and Guangzhou’s multitude of export factories none of which existed in 1980s are testimony to China’s success. …

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Is There a Real Alternative to the Ideas of Trumpism?

 

RTX1ZP41_trump_supporters-e1451321671210Let’s posit that Donald Trump’s polling power — particularly among white working-class voters — mostly reflects that group’s economic troubles and anxieties about the future. What sort of economically-sound agenda might resonate with these voters? Something other than border walls, immigrant roundups and deportation, and trade wars with Asia.

In his much buzzed-about The Atlantic piece, David Frum tries to outline just such an agenda:

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A Question For Free Traders on the Trans-Pacific Partnership

 

Up or down on the TPP? How would you decide?

When Obamacare was being debated I had liberal friends whose argument in favor consisted of “We need to do something,” and “Health care is a right.” One of my responses was that slogans are not legislation and it is only the details of bill that are relevant. In the case of Obamacare, it was a 2,000-page piece of legislation that no one understood, and today even some of my liberal friend rue its passage as they understand what it actually contained.

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Central Asia, the -stan countries that speak Turkic or Persian languages and use the Cyrillic alphabet, was a prominent and strategic region of the world in the past–think Tamerlane and his Mughal scions. This article makes the case that it is returning to strategic importance. It has a kind of blame-the-west tone, but touches on […]

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Member Post

 

While Turkey and the Middle East haunt our headlines, Allen West cautions us to not ignore China. First, West cites a report by Reuters:  More

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I, Sandwich

 

Surely all Ricochetois have read (or at least heard of) I, Pencil, Leonard Reed’s 1958 fable about the necessity of trade and how nobody could actually create a pencil on their own from scratch. If not, read it now at the above link.

Well, Reed was a lightweight. He merely talked about this principle. He never actually tried to make a pencil from scratch, all by himself. YouTuber Andy George puts Reed to shame. No, he didn’t try to make a pencil from scratch. He set out to make a simple chicken sandwich from scratch.

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Banning Ivory Will Not Save The Elephants

 

shutterstock_277259801Several years ago, my wife and I enjoyed a photo safari in Tanzania. I took nearly 1,500 photos, mostly of animals on the Serengeti, and I periodically scroll through my photo files, marveling at the grandeur of Africa. By far, the most majestic and awe inspiring animals that we encountered were the elephants. We were fortunate to get up close and personal with the herds and — on one occasion — our vehicles were challenged by a huge bull who was not amused by our presence.

These wonderful creatures are being slaughtered because they carry a valuable commodity — ivory — which has always been in great demand. At one time, there was a huge population of African elephants, so their hunting was not necessarily the evil it is today. Fortunately, elephant ivory is no longer used for consumer items such as billiard balls, piano keys, jewelry, and other utilitarian objects. It may have an incidental use for musical instruments and the like but — as with animal fur — its use is no longer commonly accepted.

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The Iowa Car Crop

 
shutterstock_83453770
“Looks like the Subarus are coming in great this year.”

According to an argument popularized by Steven Landsburg in The Armchair Economist, we have just discovered an amazing new technology. Some brilliant engineers have designed a big black box with secret, patented machines inside. This machine eats corn, and — after enough corn is consumed — it spits out a brand new car, like magic. You can even choose what kind of car you want: the color, engine, everything. The value of the corn the machine consumes is always less than value of the car it produces, so every time it is used, the wealth of society increases.

Would you want such a machine? Or would you lobby to have it destroyed for fear that it will put other car manufacturers out of business? Would you admit that it also creates jobs for farmers and, with the added wealth coming into society from the machine, it would probably allow for the creation of new jobs elsewhere? My guess is that most people would be very happy to see this machine. The auto workers would hate it, but everyone benefits who gets a new car for a lower price than they otherwise would have. Now, call that machine “Japan.” Or “China.” Now do you want it? If not, why not? That’s exactly what happens with free trade. We load a barge with grain — send it over the horizon, wait for a while — and back comes a barge loaded with cars. Isn’t that fantastic?

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Donald Trump has made public his policy proposals for immigration reform. I checked the websites of the other candidates, and his is the most detailed proposal on immigration so far. There are some items, such as e-verify, which I think most candidates would be in favor of. For the purpose of this post, I focused on those items that […]

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On Innovation, Redistribution, and the ‘Veil of Ignorance’

 

IndianSlum_Flickr_8_3_2015-e1438616049740What kind of society would you desire if you had to enter it cold, sight unseen? The classic example: What would have been the opinion of antebellum slaveholders if there were an equal chance they would enter society as a slave owner or a slave? The “veil of ignorance” is a common philosophical thought experiment for helping determine the ethics of social arrangements or of an optimal social contract. More to the point today, what sort of modern welfare state would you want if you had an equal chance of possessing the sort of innate skills likely to gain you a high income in a particular society as of not having those skills? You might, perhaps, want a social contract that includes income transfers from high skill to low skill. A social contract with social insurance. But an interesting new paper out of the Minnesota Fed by V. V. Chari and Christopher Phelan wonders about incentive effects:

For instance, policy mechanisms that transfer income from highly skilled people to those with low innate skills frequently require progressive income taxes. Such policies affect incentives regarding the acquisition of skills through effort and education. If high incomes are highly taxed, high-innate-skills individuals may have less incentive to get, say, a medical degree. Economic arrangements seen as best using the behind-the-veil criterion typically trade off such output losses against the “insurance” or welfare gains associated with transfers. … A rich-country policy to tax high incomes will redistribute income (within that country) from those with high innate abilities (and, by assumption, with the ability to become highly skilled) to those with lower innate abilities. In so doing, that policy will reduce inequality within the rich country, but it will also create disincentives there to becoming highly skilled and thereby reduce the global supply of skilled workers. This reduced supply of skilled workers from the developed country then reduces opportunities for young workers in the poor country to become skilled. … We conclude that using the behind-the-veil-of-ignorance criterion to advocate for redistributive policies within developed countries while ignoring the effect of these policies on people in poor countries violates the criterion itself and is therefore fundamentally misguided.

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On the Downside of Being an Emperor in a Democratic Republic

 

ObamaChinHere’s some bad news for a Friday: you’re going to spend most of the weekend hearing about Nancy Pelosi. The House Minority Leader, her body temperature slowly elevated to allow full mobility and partial sentience, took to the floor of the lower chamber earlier today to come out against trade adjustment assistance (TAA) in the run-up to the vote to give President Obama fast-track authorization to negotiate the Trans-Pacific Partnership trade agreement.

Now, TAA, which provides government resources for workers dislocated by international trade, is normally popular with Democrats. But Pelosi didn’t take this position on the merits. Knowing that the passage of TAA would be essential for getting Democrats behind the Trans-Pacific deal, she was trying to smother the effort in the crib. As she said on the House floor,“If TAA slows down the fast-track, I’m prepared to vote against TAA.” And she got her way: it went down handily in the House, losing the vote 126-302.

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The Battle on the Left: Inequality Democrats vs. Innovation Democrats. Which Will Hillary Be?

 

pacific_trade_shutterstock_022315Yesterday was a bad day for the big Pacific trade deal as “Senate Democrats blocked consideration of giving President Obama power to accelerate a broad trade accord with Asia, a rebuke that the president helped bring on himself,” the New York Times writes. No, the deal is not dead, but the timing is getting funky with summer almost here — not to mention the political difficulties of the approaching election year. Beyond that, there is a fascinating Democrat vs. Democrat dynamic developing, which the trade troubles reflect. This Politico piece on the party’s internal struggles is amazing:

In the fourth quarter of his presidency, without another race to run, Barack Obama has gone to war with what he sees as an out-of-touch, stuck-in-old-thinking Washington liberal elite — Elizabeth Warren’s the most famous member, but AFL-CIO president Richard Trumka and a coterie of Hill Democrats are up there with her. Obama advisers say the president sees Democratic opponents of his trade agenda as just as detached from reality as Republicans in Congress who held four dozen Obamacare repeal votes or turned raising debt ceilings and fiscal cliffs into government crisis carnivals. … For Obama, there’s a direct connection between bringing the Democratic Party into the 21st century on trade and his sense of himself as ushering in a generationally transformative foreign policy. Aides say Obama views both ideas as pragmatic, dealing with the reality in front of him. Both are about engagement. Both are about what he says is an orientation toward the future instead of sticking with the ways of the past. You can’t be a progressive on trade, he believes, unless you’re willing to talk about a new way to make trade actually work.

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The Sweetest Racket

 

shutterstock_202875223My wife and I have different approaches when it comes to the kids and dessert. She, in some attempt to instill “discipline,” rations out the sweets as if we were under a medieval siege. I — being a liberty-minded person, as well as a spineless spoiling squish — play the part of Willy Wonka without the army of creepy Oompa Loompas. There are good reasons for my approach. For one, I figure there is only going to be enough money for one of us in our old age and I don’t want the kids voting me into the government-run home. Second, my childhood meals were a bit like Lord of the Flies (without the bloodthirsty murders) and I was allowed to consume Pixy Stix as a palate cleanser in between courses of Fun Dip. This contributed to my juvenile cavities, but has turned me off to sugar to the point that I’ll opt for an after-dinner drink over any sort of sweet (though this comes with its own risks, as quickly-ordered slices of cake are less likely to run to $65 each than certain kinds of cognac).

Even as someone who passes on dessert, however, I can’t help but have my blood sugar boil over America’s sugar tariffs. These ridiculous taxes began in the late 18th Century — talk about a government program we can’t get rid of! — and have resulted in U.S. sugar prices often being twice what the rest of the world pays. Now, you might think, “Who cares, Pants? I can see the size of those pleats, and you don’t need any additional cheap carbohydrates in your diet.” Fair enough. But in typical government fashion, this market distortion causes inefficiencies and makes artificial winners and losers. The winners are the roughly 5,000 U.S. sugar producers ,while the losers are the remaining 319,995,000 or so of us. The worst hit are U.S. candy manufacturers and those who they’ve laid off since moving their factories overseas, where sugar can be purchased at market rates. Add to this all the bakers, corner candy stores, Dunkin’ Donuts franchisees, and kids who just want to enjoy a Twinkie between their extremely low-calorie, public school-sanctioned lunch and their fifth period class on historical grievances, and you can see how the losers in this game pile up.

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The Economics of The Walking Dead

 

250px-PhilipBlakeTFGAs has been pointed out in nearly every commentary on AMC’s The Walking Dead, the series is best when it focuses less on the horrors of shambling zombies than on those committed by survivors against each other.

Through the first two seasons, most of these came from hot-blooded emotions such as fear and desperation; ordinary people making bad — even evil — decisions under duress, rather than out of malice. That changed in the third episode of the third season with introduction of Philip Blake, aka the Governor.

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