Recently I pointed out that Sumner's claim that in a truly free unfettered market there shouldn't be a problem with inequality is just a theory. It's a very long held theory in Neoclassical economics so he figures he doesn't have to justify it. But where is the proof of this proposition? One could certainly argue that US inequality was worse in the 19th century before we regulated the market.
http://diaryofarepublicanhater.blogspot.com/2015/06/sumner-on-how-capitalism-is-supposed-to.html
Sumner may tell us 'How capitalism is supposed to work' but we have a right to ask where his evidence of that is.
It strikes me that this is why laypeople have a hard time getting along with academic economists. When you try to ague with an economist what you have to understand is that they have all kinds of theoretical assumptions that they feel very confident in having based on the fact that most others in their profession agree and the profession has agreed with these theoretical assumptions for a long time.
The other day Maggie, a friend of mine on Twitter worried that the debate over Obama getting trade authority was going to rip the party in half. Based on some discussions I've had on Twitter-with others who disagree with me on FTA-she may be right.
I had an argument with someone who I agree with on most issues-we are both Democrats and support President Obama. However, he is glad that the House Dems rebuffed him on FT yesterday and I feel they threw the President under the bus for no good reason.
My main argument to him was that whether or not you like the TPP or any other particular trade deal, the President deserves FTA. After all, every other Head of State in the world has it-as other countries are either dictatorships or parliamentary democracies.
Every GOP President always gets it too.
http://diaryofarepublicanhater.blogspot.com/2015/06/today-again-shows-that-democratic.html
So basically every Head of State in the world gets FTA except Democratic Presidents. This strikes me as unfair and a mistake by Democrats.
However, my Twitter friend-whose name like mine is Mike-mostly glossed over this point and just kept categorically declaring that all trade deals shutdown factories and screw workers. That was all anyone needs to know he seemed to think.
So finally I switched tact and simply asked him how he knows every trade deal kills jobs? His answer was kind of hand-wavy-'C'mon everyone knows they kill jobs. Look at the historical record.'
I pointed out that as he's making this claim he ought to provide me with the links that demonstrate this. He didn't get back to me.
Don't get me wrong: My argument was not that trade deals don't cost jobs, I just asked where the empirical evidence is that they do.
It occurred to me that in a sense we all have theories-not just academic economists. This is what Krugman meant by 'The Accidental Theorist.'
http://www.amazon.com/The-Accidental-Theorist-Dispatches-Science/dp/0393318877
We all have theories for what the economic impact will be of a particular policy, just laypeople don't even realize this.
As for trade many liberals have a theory that trade deals or at least modern ones in the Post NAFTA era-hurt workers by shutting down factories and killing jobs.
I've often made this same argument myself. But is it true based on evidence? Where is the data that really looks at the effect of NAFTA and subsequent trade deals on jobs?
My point is not that I've now decided that they don't kill jobs. Just that I don't see evidence that they do-or don't.
If anyone has such evidence now is the time to come forward!
P.S. If you were to look at net jobs in 1993 pre NAFTA to today do we have more or less jobs? We certainly have considerably more. In that sense how can it be said to kill jobs?
However, I do think that as a society we've seen our economy go from being manufacturing based to service based. I do think that this has meant a drop in wages for the median worker.
So rather than cost jobs it's more arguable that the recent trade deals have hurt the wages of at least unskilled workers.
Service jobs pay much more poorly than manufacturing jobs. However, did NAFTA, et. al cause this change to a service economy? Krugman argues no-that it's more to do with automation thanks to the tech revolution.
He argues that on net effect this trade deal and others has little effect on jobs either way; he argues that trade opponents tend to exaggerate by claiming it will kill lots of jobs but that trade advocates also exaggerate by claiming that they will create a lot of jobs.
Basically, his argument is that trade deals are neither job killers or job creators.
None of this tells us whether TPP is a good deal or not. My argument to Mike and others is simply that we should just let the President have his FTA like every other Head of State in the world but Democratic ones get and then look at the deal once it's agreed to in the trade talks. Then it goes before Congress and we can figure out whether TPP is a good deal or not.
We'll see if it say does give Wall Street a race to the bottom in regulations. If this is the case it can be read about then and an informed decision can be made.
http://diaryofarepublicanhater.blogspot.com/2015/06/sumner-on-how-capitalism-is-supposed-to.html
Sumner may tell us 'How capitalism is supposed to work' but we have a right to ask where his evidence of that is.
It strikes me that this is why laypeople have a hard time getting along with academic economists. When you try to ague with an economist what you have to understand is that they have all kinds of theoretical assumptions that they feel very confident in having based on the fact that most others in their profession agree and the profession has agreed with these theoretical assumptions for a long time.
The other day Maggie, a friend of mine on Twitter worried that the debate over Obama getting trade authority was going to rip the party in half. Based on some discussions I've had on Twitter-with others who disagree with me on FTA-she may be right.
I had an argument with someone who I agree with on most issues-we are both Democrats and support President Obama. However, he is glad that the House Dems rebuffed him on FT yesterday and I feel they threw the President under the bus for no good reason.
My main argument to him was that whether or not you like the TPP or any other particular trade deal, the President deserves FTA. After all, every other Head of State in the world has it-as other countries are either dictatorships or parliamentary democracies.
Every GOP President always gets it too.
http://diaryofarepublicanhater.blogspot.com/2015/06/today-again-shows-that-democratic.html
So basically every Head of State in the world gets FTA except Democratic Presidents. This strikes me as unfair and a mistake by Democrats.
However, my Twitter friend-whose name like mine is Mike-mostly glossed over this point and just kept categorically declaring that all trade deals shutdown factories and screw workers. That was all anyone needs to know he seemed to think.
So finally I switched tact and simply asked him how he knows every trade deal kills jobs? His answer was kind of hand-wavy-'C'mon everyone knows they kill jobs. Look at the historical record.'
I pointed out that as he's making this claim he ought to provide me with the links that demonstrate this. He didn't get back to me.
Don't get me wrong: My argument was not that trade deals don't cost jobs, I just asked where the empirical evidence is that they do.
It occurred to me that in a sense we all have theories-not just academic economists. This is what Krugman meant by 'The Accidental Theorist.'
http://www.amazon.com/The-Accidental-Theorist-Dispatches-Science/dp/0393318877
We all have theories for what the economic impact will be of a particular policy, just laypeople don't even realize this.
As for trade many liberals have a theory that trade deals or at least modern ones in the Post NAFTA era-hurt workers by shutting down factories and killing jobs.
I've often made this same argument myself. But is it true based on evidence? Where is the data that really looks at the effect of NAFTA and subsequent trade deals on jobs?
My point is not that I've now decided that they don't kill jobs. Just that I don't see evidence that they do-or don't.
If anyone has such evidence now is the time to come forward!
P.S. If you were to look at net jobs in 1993 pre NAFTA to today do we have more or less jobs? We certainly have considerably more. In that sense how can it be said to kill jobs?
However, I do think that as a society we've seen our economy go from being manufacturing based to service based. I do think that this has meant a drop in wages for the median worker.
So rather than cost jobs it's more arguable that the recent trade deals have hurt the wages of at least unskilled workers.
Service jobs pay much more poorly than manufacturing jobs. However, did NAFTA, et. al cause this change to a service economy? Krugman argues no-that it's more to do with automation thanks to the tech revolution.
He argues that on net effect this trade deal and others has little effect on jobs either way; he argues that trade opponents tend to exaggerate by claiming it will kill lots of jobs but that trade advocates also exaggerate by claiming that they will create a lot of jobs.
Basically, his argument is that trade deals are neither job killers or job creators.
None of this tells us whether TPP is a good deal or not. My argument to Mike and others is simply that we should just let the President have his FTA like every other Head of State in the world but Democratic ones get and then look at the deal once it's agreed to in the trade talks. Then it goes before Congress and we can figure out whether TPP is a good deal or not.
We'll see if it say does give Wall Street a race to the bottom in regulations. If this is the case it can be read about then and an informed decision can be made.
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