Monday, April 30, 2007

The rancid milk of one of protectionism's sacred cows exposed

If you were ever unconvinced that Lou Dobbs is full of shit, you need look no further.

I must say that were I a protectionist, particularly a protectionist attempting to give social momentum to the protectionist movement, the first thing I would do would be to cut any and all ties (if ever there were any) with Lou Dobbs as it is now clearer than ever that he is not an academic source by any measure.

In addition, I add something the writer forgot. In masking Dobbs' "unemployment rate at less than one half of one percent" fallacy, he ought to point out that basic knowledge of macroeconomics recognizes that the full employment unemployment rate in the United States is between 4 and 5 percent and that any rate below that-especially as severly below as 0.5 percent-suggests that either a.) the American economy is hemhorraging money mandatorily employing structurally and frictionally unemployed people or b.) that macroeconomic theory is wrong. Need I say more?

Well, I shall:

"But, generally speaking, the Protective system in these days is conservative, while the Free Trade system works destructively. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the Free Trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favor of Free Trade."
-Karl Marx

1 comment:

Anonymous said...

Lou Dobbs is the ultimate bloated fish in the modern-day barrel of protectionist politics.

Here's the argument to give to anti-free traders out there. Let's assume that a your parent (or child or lover or favorite baseball player) suffers from a disease which has been, up to now, incurable. A team of 10 bright young medical researchers in Lou Dobbs' favorite country, India, work night and day to come up with a medicine to treat the disease. And they succeed. Your loved one can now be saved, and live a full and fruitful life.

But wait. For you to get the medicine, you will need to pay for it, or at least trade something for it. Worse still, the 10 medical researchers were funded by a large American-headquartered pharma company which, for the same price, could have "saved" the jobs of two or three medical researchers at its recently closed research center somewhere in Southeastern Michigan. Maybe the three would have come up with the same cure, maybe they wouldn't have. The pharma company, motivated by the prospect of profit, made the judgment that it had a better chance of developing the new medicine with the 10 Indians than with the 2 or 3 Americans.

Now let's assume you're Lou Dobbs, and this situation presents itself. WWLD (What Would Lou Do?)

Surely he couldn't buy the drug from the pharma company. After all, they took away good jobs from good Americans. The money spent on the drug would go in part to fund more research in India, not America. To export the medical research necessary to make the drug from India to America would require trade to occur. Or maybe that trade is ok, but only if it's taxed or tariffed. But then it would be harder for the sick to afford the drug.

Maybe Lou thinks that medicines are different, that these rules shouldn't apply if lives are at stake, but they should apply if the issue is Toyotas vs. Chevys or the location of software engineers. But it's not so simple -- those software engineers might be working on something which saves lives, too.

Of course, you could just let people who make the best product for the best price gain the business. Nah, never mind -- Lou would never go for that.