Quote:
Originally Posted by DaRooster
Restricting trade?
The truth of the matter is those tires are made buy companies based here in America....the only TRADE is the Chinese have a job making the tires Americans should be making....thats the sad truth.
What needs to be done is pass laws that prohibit US companies to move their factories out of the US...now that would be a good law to pass.
This Economy will never recover if the 6 million people currently un employed only have the option of working at Wal-mart, Loews, CVS and walgreens.
America needs jobs...and I dont see that changing to any degree with China selling us our own goods back to us...Insane !!!!
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Just curious, but why do you think that keeping companies withing the US would be better? Wouldn't you agree that it would be allocatively inefficient? I will expand on this, but I am curious to hear your line of thinking. Also, jobs are better than no jobs? It does create income as opposed to no income..
I can quickly sum up my side in a phrase: the theory of comparative advantage. The cost of providing for inefficient industries (this example: the tire industry lacking trade) and jobs is more efficient jobs and a wealthier economy. Given that the variable in question, wages, is a function of productivity, the economy and more specifically WORKERS would see improvement via better jobs if there could be a transition from less efficient industry to more efficient. This is essentially the idea of free trade. By placing regulation and making it harder to trade, the industry becomes less efficient. The tired industry (since this is the industry we are speaking of) could certainly benefit from the unregulated trade. Both parties would benefit and this would ultimately help the consumer to get a better price on the product as the producers are now more efficient (lowering their opportunity cost in utilization of their resources) which hopefully could drive up the demand and THEN you get your stimulation of the economy.
This inefficient industry's opportunity cost is that it now must steal from the economy's scarce resources and JOBS that could be created elsewhere. What does this mean? It makes our weakened economy
weaker.
Ok ok, I've said my bit. I would love to hear what you think of this matter as it is an interesting one. As a student of the dismal science, I enjoy looking at these issues from a variety of angles. There is no doubt that our economy is in bad shape, but the policies of our government lately generally have economists outraged (trade regulation, minimum wage was a risk as it acts as a price floor, the talks of nationalized health care, etc).
**I realized how much rambling this was in alot of terminology. Basically what I'm saying is I feel that by restricting trade we are making our industries less efficient - we will have to use up scarce resources that could have been used elsewhere, and jobs that could have been had elsewhere.**
09-17-2009, 04:34 PM
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