Cato's Trade Report: Blinded by Ideology

CREATORS SYNDICATE ^ | October 10, 2007 | Paul Craig Roberts

[BGHater]

Your in trouble now. You posted PCR stuff.

[Dog Gone]

How much of the trade deficit was due to oil imports?

Why does that never enter into the discussion and the fact that 85% of our coastline is off limits to oil exploration?

[rb22982]

About half at $65-70/barrel.

[Dog Gone]

Seems to me that we’re doing everything we can to not discuss the real problem.

[Bishop_Malachi]

Can you point me to some of these companies that are making “obscene” profits that “disconnect” then from welfare of the general American?

I’d like you to do so, because I’d like to buy stock in them and thus reconnect their growing profits with my own personal welfare.

[ReleaseTheHounds]

Let’s see... Paul Craig Roberts or the Cato Institute... Whom to believe...

[ari-freedom]

If you don’t know what to do, err in the side of more freedom and less govt regulation.

[Pelham]

Point to me where Roberts used “obscene” profits in his essay. I must have overlooked it.

[Pelham]

It’s entertaining to poke a stick in the anthill.

[Mase]

PCR has come up for air. The meds must be helping.

[iowamark]

In January 2004 in the New York Times and at a televised Brookings Institution conference, Senator Charles Schumer and I attempted to create a new discussion

Common sense should tell you not to drink the poison these people are selling.

[1rudeboy]

Ikenson slaps Roberts down pretty hard, here:

In an opinion piece published this week, Paul Craig Roberts takes exception to a conclusion in my recent Cato paper about the state of U.S. manufacturing. I usually welcome disagreement as an opportunity to elaborate or persuade. But it’s quite evident that Roberts is not interested in elaboration and is beyond persuasion. The purpose of his dissent was to construct a straw man against which he could present his skeptical, and empirically refutable, views about trade.
[]
I usually don’t mind disagreement with my point of view. It happens frequently. But I find it offensive when someone disparages and dismisses my work without a coherent basis for doing so.
Paul Craig Roberts Misses the Mark.

[1rudeboy]

Isn’t it though? You should’ve seen the acrobatics when I refer to Ikenson’s piece. That’s why PCR had to write something . . . the natives were banging the drums.

[Just mythoughts]

Why does that never enter into the discussion and the fact that 85% of our coastline is off limits to oil exploration?

Probably a secret deal with Putin to keep his nose clean in Iraq, on put the squeeze on Iran, or not stir up the mental Il of N. Korea. None of our greenies complain about him becoming the new oil cartel.

[LowCountryJoe]

Has PCR ever answered the contents of this podcast which, specifically to him and Chuck Schumer, begin around the 23:00 mark?

[arthurus]

“Obscene” profits are money the government would like to get its hands on.

[Mase]

But I find it offensive when someone disparages and dismisses my work without a coherent basis for doing so.

Thanks for the link to Ikenson's reply. What he says about PCR above has pretty much been PCR's MO since I joined the forum. This is exactly how our resident paleos reacted to Ikenson's original piece on manufacturing.

[Toddsterpatriot]

Obviously, corporations that arbitrage labor and replace their US employees with less expensive foreign labor are going to enjoy greater growth in profits and value added.

This certainly explains why foreign automakers keep opening plants in the US.

[1rudeboy]

They really don't have much of a choice (with regard to reactions). Note that PCR cedes to the notion that our manufacturing sector is plugging right along. His contention is that the healthiest portion of the sector is plugging along with imported goods (meaning that the U.S. manufacturers that are importing are driving the U.S. manufacturers that do not into the ground--"import competition"). He "carelessly" [chuckle] claims that Ikenson's data shows it.

Ikenson writes,

First of all, nowhere in my paper do I attribute the health of U.S. manufacturing to import competition. The only passage from which such an interpretation might be drawn (by a careless reader, I would add) is this one: “Revenues, profits, output, value added, and even compensation rose the most for industries most exposed to import competition, and they rose the least for those industries experiencing the smallest increases in imports.” That is just a statement of fact, as gleaned from the data. It assigns no causation to import competition.

[]

Second, my failure to distinguish between sources of imports in no way undermines the central points of my paper. The purpose of my paper (“Thriving in a Global Economy: The Truth about U.S. Manufacturing and Trade”) was simply to evaluate the health of the U.S. manufacturing sector. The conventional wisdom holds that U.S. manufacturing is eroding, the country is de-industrializing, and that import competition is the driving force behind this trend. We hear this all the time. Politicians tell us. Op-ed page writers remind us. Lou Dobbs warns us. And members of Congress have proposed all sorts of punitive trade legislation under the banner of arresting and reversing manufacturing decline.

I set out simply to assess the credibility of the premise. My approach was straightforward, honest, and devoid of ideology. There was no shell game or sleight of hand. I found the most relevant, comprehensible, comprehensive, objective statistics that speak to the health of the sector, presented those data, and offered conclusions that are easily verifiable (i.e., not confused by economic modeling or econometrics or the debatable assumptions upon which such approaches often rely).