Trade Bill Puts Jobs On Agenda

IBD Editorial ^ | October 3, 2011 | Editor

[Kaslin]

Economy: After years of dithering and bowing to protectionists, President Obama finally submitted three pending free-trade pacts with South Korea, Panama and Colombia to Congress for a vote. Let the U.S. economy recover.

The president's decision marks the first bright economic move he has made to boost the nation's ailing economy. Dropping tariffs, opening markets and equalizing investment terms are a proven way to boost economic growth.

Contrary to all the nonsense about outsourcing and giant sucking sounds, the real impact of free trade is new freedom and opportunity.

The pacts are now on their way to a vote in Congress after a long delay, marking Obama's first real shift from campaign demagogue captive to special interests to President of the entire U.S.

"These agreements will support tens of thousands of jobs across the country for workers making products stamped with three proud words: Made in America," the White House said in a statement.

The White House knows this is a winner: "Growing American exports to South Korea, Colombia and Panama will support tens of thousands of jobs here at home," said U.S. Trade Representative Ron Kirk, who encouraged the bill's passage "without delay."

The legislative process will begin next week, and both the White House and congressional leaders say the votes are there to pass it. But they always have been — the big change is the end of the president's hesitancy to submit them and Big Labor's campaign to block it.

[Toddsterpatriot]

Our typical 600 billion dollar annual trade deficit is very comparable to the Federal budget deficit. They are both huge and disgraceful numbers.

And you still haven't shown how one causes the other.

[Toddsterpatriot]

You figured wrong. Again. Go figure.

[1rudeboy]

And the trade deficit dropped by what, half, after 2007? You sure know how to choose your data points. So what happened after 2007 that caused the trade deficit to drop, while the budget deficit exploded? Wherein lies the greatest danger?

[dennisw]

And the trade deficit dropped by what, half, after 2007? You sure know how to choose your data points. So what happened after 2007 that caused the trade deficit to drop, while the budget deficit exploded? Wherein lies the greatest danger?

Idiot chile.... of course our trade deficit dropped during and after the 2007-2008 crash
These days our trade deficit is about >>> 600 billion per year so it way up there again not that you care. At its highest it was 750 billion in 2006 or so. Go check out the numbers

"Sep 8, 2011 – For the three months ending in June, the average trade deficit was $48.3"         So that is about a 600 billion per year rate

[1rudeboy]

Right. So unless your plan is to wait for a deeper recession to start fixing the trade deficit again, why not focus on the budget deficit, which is the greatest problem.

[algernonpj]

... Economics tells us again and again that free trade is the best trade policy due to comparative advantage and us “producing” by exporting (otherwise called the Roundabout way to wealth coined by an economist David Ricardo). ...

Ahh .. good ole Ricard and 'comparative advantage'.

For Ricardo's theory of comparative advantage to work, a country's labor, capital, and technology must not move offshore. offshore. Ricardo himself admits this. International immobility is necessary to prevent a business from seeking an absolute advantage by going abroad. His theory only works for such factors as geography and climates. Ricardo assumes that patriotism will check investment abroad even under absolute advantage.

From: The Works and Correspondence of David Ricardo, Vol. 1 Principles of Political Economy and Taxation [1817], Chapter Vii, On Foreign Trade:
"The same rule which regulates the relative value of commodities in one country, does not regulate the relative value of the commodities exchanged between two or more countries"
...
From Ricardo's discussion of the famous example of Portugal producing wine and England producing wool:
"The difference in this respect, between a single country and many, is easily accounted for, by considering the difficulty with which capital moves from one country to another, to seek a more profitable employment, and the activity with which it invariably passes from one province to another in the same country.

It would undoubtedly be advantageous to the capitalists of England, and to the consumers in both countries, that under such circumstances, the wine and the cloth should both be made in Portugal, and therefore that the capital and labour of England employed in making cloth, should be removed to Portugal for that purpose.

Experience, however, shews, that the fancied or real insecurity of capital, when not under the immediate control of its owner, together with the natural disinclination which every man has to quit the country of his birth and connexions, and intrust himself with all his habits fixed, to a strange government and new laws, check the emigration of capital. These feelings, which I should be sorry to see weakened, induce most men of property to be satisfied with a low rate of profits in their own country, rather than seek a more advantageous employment for their wealth in foreign nations."

Ricardo's theory of comparative advantage does not apply to today's world. Just look at our current economic situation.

[dennisw]

Do both idiot chile

[dennisw]

Good summary. If the Unites States of America dies and gets a tombstone this is part of what what will be inscribed—

“He believed in the great lofty principle of free trade even as it killed him and made his people jobless and impoverished”

[algernonpj]

Thanks.

[algernonpj]

Thanks. Feel free to borrow.

[dennisw]

For Ricardo's theory of comparative advantage to work, a country's labor, capital, and technology must not move offshore

All the above are very mobile these days. Capital being mobile is always easy. But today We even have illegal immigration which makes labor mobile. 
Technology is easily stolen, spread and diffused. Riccardo is good but these days with our massive international capital flows to the country with the best (hottest) investments, Ricardo is irrelevant these days

All the free trade theories are from a bygone age. The Orientals don't believe this illogical garbage. Go ask Korean, Chinese, Taiwanese, Chinese what they think. They practice mercantilism, not free trade

[algernonpj]

...All the free trade theories are from a bygone age. The Orientals don't believe this illogical garbage. Go ask Korean, Chinese, Taiwanese, Chinese what they think. They practice mercantilism, not free trade

Yup ...

[HiTech RedNeck]

If you owe $400,000 worthless pieces of paper to your creditors do you plan on screwing them via a default?

That's something you might want to consider if it's the last day of your life and you have no heirs!

[Toddsterpatriot]

“Dennis believed in the great lofty principle of big government even as it killed him and made his people jobless and impoverished”

[familyop]

Well written, and thanks.

[dennisw]

Tard- I am for big tariffs and small Federal Gov’t. You can check my posting history on this. Many posts such as “nuke the EPA” and bulldoze the Department of Education and fire all who work there

[1rudeboy]

“He believed in the great lofty principle of fairness even as it killed him and made his people jobless and impoverished, and yet he kept crying like a baby for his government to save him.”

[Toddsterpatriot]

Dennis thinks big government restricting freedom is bad, unless big government is restricting the freedom to purchase from whomever you’d like.

[1rudeboy]

oops . . . I meant to ping you to my previous comment

Can't argue economics, start chanting populist slogans. Say, were you protesting on Wall Street yesterday?

[algernonpj]

Well written, and thanks.

My pleasure. Fell free to copy.