Nice one pager on trade from Greg Mankiw's blog. Had gone to this link for solace after reading about Hillary Clinton's China bashing.
Greg Mankiw's Blog: Outsourcing Redux
Mankiw is stating the obvious, the part pretty much everybody agrees on.
The hard part is: how does one make free trade a vote winner? Or at least not a vote loser. Can't trade become an obscure technical issue that almost nobody cares about...like internet protocols or something? Did any politician ever make trade a vote winner? Vaclav Havel?
1 comment:
The piece I see mentioned very rarely is the 'balance of trade'. In the long term all exports, including outsourcing, need to be balanced by imports. A dollar less outsourcing DOES mean a dollar less imports over the long term. The bigger challenge for the US might be that most outsourcing or importing is driven by a huge difference in wages. That means the imports affect more people negatively at a personal level than the exports help. And, that much larger number of people have a much larger number of votes ...
The piece I see missing from US debate is how their society needs to support and adapt. The changes are much swifter than the typical rate of change of societal norms, and spending time on protectionism is actually moving the societal norms in precisely the wrong direction. BTW, I suspect countries who are big winners from better links with the rest of the economic world may well have found trade a clear vote winner. Maybe, China (no vote, but you know what I mean), Ireland, Japan?
Post a Comment