NetNews Usenet Archive 1992 #26/NN_1992_26.iso/spool/sci/econ/8556

Text File | 1992-11-10 | 3.6 KB | 72 lines

Newsgroups: sci.econ
Path: sparky!uunet!caen!zaphod.mps.ohio-state.edu!magnus.acs.ohio-state.edu!cthorne
From: [e-mail] (Charles E Thorne)
Subject: Re: Trade War?
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Date: Tue, 10 Nov 1992 19:50:14 GMT
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In article <[e-mail]> [e-mail] (Peter Nelson) writes:

>In article <[e-mail]> [e-mail] (Charles E Thorne) writes:
>>In article <[e-mail]> [e-mail] (Peter Nelson) writes:
>>>In article <[e-mail]> [e-mail] (Charles E Thorne) writes:

>>>>However, I expect we'll see a lot more protectionism in the years ahead.
>>>>With the large U.S. budget deficit, sending military aid to the rest of the
>>>>world and allowing them to send products to the U.S. in competition with
>>>>our producers will become politically undesirable in the years to come.

>>>   How does it follow that this will result in more protectionism?

>>Clinton ran on a ticket of increasing U.S. jobs.  One way to indicate that
>>he's serious about this would be to propose laws that would decrease losing
>>jobs to other countries.  Thus protectionism would increase (he also had
>>serious questions about approving NAFTA).

>   Only if you think protectionism protects jobs.   I don't know how
>   stupid Clinton is, so I won't speculate on what he might do, but
>   considering the hundreds of billions of dollars in goods and
>   services the US exports every year, and the millions of US jobs
>   that depend on this, he would need to have an awfully good
>   crystal ball to guess whether any particular protectionist act
>   would actually save jobs, or cost jobs due to the effects of
>   foreign retaliation, not to mention the effects on the domestic
>   economy of having to pay more for whatever the product in question
>   was.   Studies of the "voluntary" import quotas on Japanese cars
>   indicated that the cost to the economy for every job saved was
>   far greater than the income generated by that job.

At no point did I indicate that protectionism is a good idea.  The information
I have is that jobs protected by tariffs cost consumers in the neighborhood
of $60-$100,000 per year in increased costs.  That doesn't mean that we
won't see protectionism.  To pay three times as much for clothing to save
a less than $10 per hour textile job doesn't make sense, but that doesn't
mean it won't be done.  I doubt if France's subsidy of it's farmers is a good
idea (nor is ours), but the politics encourages it.  Japan could buy rice for
less than 1/3 as much, if they didn't want to protect their politically
powerful farmers.


>>I would expect that the U.S. forces in Europe would decline substantially
>>(although the Europeans have already complained that we're not doing enough
>>about solving the Serbian-Crotia issue).

>   So let them complain.  I don't see them doing anything.

>>Unfortunately, reducing military expenditures will also increase unemployment
>>--both in military forces and in defense industries.

>   Right.  We know this.   What does it have to do with the topic at
>   hand?

I expect that the Democrats arguement that all of Clinton's programs can be
paid for with the "savings"in military expenditure are pie in the sky dreaming.

Charlie