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'[OT] Protection, Employment, resumes, and green ca'
2007\06\28@024656 by Cedric Chang

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face
>
> On Jun 27, 2007, at 3:05 PM, M. Adam Davis wrote:
>
> On 6/25/07, Vitaliy <spam_OUTspamTakeThisOuTspammaksimov.org> wrote:
>> Xiaofan Chen wrote:
>>> Certain protection of certain industry is inevitable. Even for  
>>> those so
>>> called
>>> "free trade" countries, there ought to have some kind of protection.
>>
>> I've never heard a rational, logical explanation why the above  
>> statement is
>> true.
>
> 1. The government is charged by the public to maintain and improve the
> economy of the country.
The US constitution does not give the government this job.  A deluded
public may think the government can manage the economy.  Most
economists disagree.  ( See the book by Bryan Caplan , " The Myth
of the Rational Voter " )

{Quote hidden}

Cheaper steel helps the economy ( See Caplan book )  Workers lose jobs
and other citizens benefit.  An improving economy requires workers to  
upgrade
their skills.  Money is not lost to other countries.  Voters equate  
jobs as prosperity
when usually the opposite is true.  Because of an expanding economy more
people have more leisure time.  Why do so many two wage-earner  
families exist ?
Simply because people want more stuff than they were satisfied with  
in the earlier
1900s.


>
> Or we can ask the government to place extra burden on
> products/materials/etc in such a manner that it gives us time to work
> through the problem - lay off workers slowly, invest in more efficient
> equipment, etc.

The marketplace handles this faster and more effectively than the
government.
>
> Ideally this is a short period of time to allow things to equalize
> slowly, but various lobbies, unions, political interests allow these
> to tarry far longer than originally intended.
Lobbies, and political interests exist because of the government.  
The government
creates problems that it is slow to fix or never fixes.  Unions are  
largely
a child of the government as well.
>
> This ignores many of the 'fake' economies set up by other governments.
>  If a country decides to build a steel factory using gov't funds, and
> then "sell" it to a private company for far less than the equipment
> cost, then of course the steel is going to cost less than here, even
> after shipping.  It may seem short sighted to do that, and assuming a
> level playing field the gov't will bankrupt itself doing that, but by
> performing such transactions in a careful manner one can sap much more
> money from another country and sow it into your own economy than would
> otherwise happen, and the returns can be greater than the expenses.
Price supports by governments to prop up industries cost the taxpayers,
harms the taxpayers and cripples the ability of the marketplace to move
to more effective products and services.  A level playing field is  
not necessary
for companies to be successful.  Japan tried the protectionist game at
a higher level than the USA and is suffering for it now.

>
> So, whether it's good or not in general, or in any given situation, I
> don't know.  But I hope you can see that there is at least one logical
> argument for considering such a step.  When the sector that's hit is
> large enough, then it's important to moderate the impact, and this is
> one tool all governments use to do so.
You can see that I believe moderating the impact is generally creates  
more
suffering than letting it happen.  Bryan Caplan agrees with me or I  
with him.
Of course, this is one man's opinion.  Donald Wittman is the author of
The Myth of Democratic Failure: why political institutions are  
efficient.
He disagrees with me.
Cedric
>
> -Adam

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2007\06\28@090731 by Gerhard Fiedler

picon face
Cedric Chang wrote:

>> So a situation arises: Steel becomes vastly cheaper overseas (reasons
>> are complex, but let's ignore that for now).  Now we have a choice - we
>> can either allow tens of thousands of American workers lose their jobs,
>> allow hundreds of millions of dollars leave America to be sown into
>> another country's economy, and allow all the side effects to occur
>> (trickle down, trickle up, etc.).  These are sectors that if hit hard
>> enough will significantly shake the economy.
>
> Cheaper steel helps the economy ( See Caplan book )  Workers lose jobs
> and other citizens benefit.  An improving economy requires workers to
> upgrade their skills.  Money is not lost to other countries.  

The problem may be that after a few years, when there's no relevant steel
production anymore, the other country could raise the price substantially,
or -- for strategic reasons -- may not sell at all anymore. It is usually
much quicker to shut down production (could be immediately) than to take it
up again (may take a decade).

Similar thoughts go for food supply. It's a tricky thing.

Gerhard

2007\06\28@204253 by Xiaofan Chen

face picon face
On 6/28/07, Gerhard Fiedler <.....listsKILLspamspam@spam@connectionbrazil.com> wrote:

{Quote hidden}

Globalization on a whole is a tricky thing. I am all for it but it is really
complicated.

http://news.com.com/An+iPod+has+global+value+ask+the+many+countries+that+make+it/2100-1041_3-6193854.html?tag=nefd.top

"This value-added calculation illustrates the futility of summarizing
such a complex manufacturing process by using conventional trade
statistics. Even though Chinese workers contribute only about 1 percent
of the value of the iPod, the export of a finished iPod to the United States
directly contributes about $150 to our bilateral trade deficit with the
Chinese."

"The real value of the iPod doesn't lie in its parts or even in putting those
parts together. The bulk of the iPod's value is in the conception and design
of the iPod. That is why Apple gets $80 for each of these video iPods it sells,
which is by far the largest piece of value added in the entire supply chain."

I think that is why US government has to protect the competitiveness of
the hi-tech industry (Apple is one of them).

2007\06\28@213216 by Gerhard Fiedler

picon face
Xiaofan Chen wrote:

> I think that is why US government has to protect the competitiveness of
> the hi-tech industry (Apple is one of them).

But I think that hi-tech, other than e.g. steel, can't be protected by
barriers. It only gets protected by an innovative market.

Gerhard


'[OT] Protection, Employment, resumes, and green ca'
2007\07\01@205842 by Xiaofan Chen
face picon face
On 6/28/07, Gerhard Fiedler <listsspamKILLspamconnectionbrazil.com> wrote:
> > I think that is why US government has to protect the competitiveness of
> > the hi-tech industry (Apple is one of them).
>
> But I think that hi-tech, other than e.g. steel, can't be protected by
> barriers. It only gets protected by an innovative market.
>

Actually what I said is "to protect the competitiveness" and not
"protect by barriers".

To protect the competitiveness of the hi-tech industry or other industries
that US excels (eg: Financial service), the government can use many ways.
One is to pressure other countries to open the market. The other is to
set up or raise the standard to create an high entry barrier. H1 may be
another method.

It seems to me that the European countries are using non-tariff barriers
the most often by having so many EU directives.

2007\07\01@213506 by Gerhard Fiedler

picon face
Xiaofan Chen wrote:

> It seems to me that the European countries are using non-tariff barriers
> the most often by having so many EU directives.

But those are not barriers against entry of foreigners. They are equally
valid barriers for EU companies... :)

Gerhard

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