Post by Nadegda
Four economic ideas disproven by reality.
The commonality: they are all *conservative* economic ideas.
Proves what I've been saying all along: conservatives are delusional kooks.
Every last one of them.
Your own VOX article shows you are wrong.
And clearly shows what Globalization push of POTUS Bill Clinton
and POTUS Obama and candidate Hillary Clinton got all wrong.
The Democratic party abandoned American manufacturing
workers, and that is why we have POTUS Trump.
He understood and talked to their plight.
Hillary disdained them and did not even campaign
as if she cared about their problems.
"2) Everybody wins with globalization
Back in the 1990s, when the Clinton administration was trying to sell
NAFTA, the view that expanded trade was virtually all upside began to
pervade the rhetoric and politics of both parties. They were supported
by economic arguments that exporting industries would expand into
markets and add new jobs, and consumers would have cheaper goods. By
dint of their superior productivity, US manufacturers and their
communities wouldn’t be hurt. Any disruption to workers’ livelihoods was
either dismissed as an impossibility or placed under the antiseptic
rubric of “transition costs.”
This excerpt from the 1994 economic report of the president nicely
captures the zeitgeist:
As economists have long predicted, freer trade has been a win-win
strategy for both the United States and its trading partners, allowing
all to reap the benefits of enhanced specialization, lower costs,
greater choice, and an improved international climate for investment and
innovation. American industries—both their workers and their owners—have
benefited from increased export markets and from cheaper imported
inputs. American consumers have been able to purchase a wider variety of
products at lower prices than they could have without the expansion of
When pressed as to how expanded trade could truly be “win-win,”
advocates like Clinton’s economics team above cited the economic theory
of comparative advantage: When trading partners produce what they’re
best at producing, both countries will come out ahead.
But the theory never said expanded trade would be win-win for all.
Instead, it (and its more contemporary extensions) explicitly said that
expanded trade generates winners and losers, and that the latter would
be our blue-collar production workers exposed to international
competition. True, the theory maintained (correctly in my view) that the
benefits to the winners were large enough to offset the costs to the
losers and still come out ahead. But as trade between nations expanded,
policymakers quickly forgot about the need to compensate for the losses.
The era of free trade eventually led to large trade deficits with
countries with comparatively productive factories to ours but with much
lower wages, most notably Mexico and China. As in every other advanced
economy, the share of US manufacturing employment had long been drifting
down. But the number of US factor jobs held pretty constant around 17
million — until around 2000, when, over the next decade, almost 6
million such jobs were lost. Economists who’ve studied the period now
refer to it as “the China Shock.”
Once again, these impacts didn’t just translate into just job losses;
wages were hit, too. Between the late 1940s and the late 1970s, when
production workers were relatively insulated from foreign competition,
blue-collar manufacturing compensation more than doubled. By contrast,
it’s grown only 5 percent since then.
Did the winners from trade — the multinational corporations that
relocated production, the finance sector that made the deals, the
retailers that profited from “the China price” — compensate the losers?
Of course not. They argued that “everyday low prices” were reward enough.
But not only did the winners fail to help the losers — say, through
serious employment-replacement programs, robust safety net assistance,
direct job creation, and investments to make our manufacturers more
competitive — they instead used their winnings to invest in politicians
to cut their taxes and write ever more trade deals favoring investors
Let me be very clear. Both the US and developing countries have
significantly benefitted from global trade. But because of the
demonstrably false view that free trade is all upside — win-win —
considerable economic pain has been meted out, pain that has not been
met with anything approaching an adequate policy response."