[JerryLove]

Relevance? Wouldn't that just make Indian labor more expensive because of the higher "shipping" costs?

There are no "shipping" costs, so "no".

And American and India are both operating under the same global economy. This can be extended down to counties and cities, too.

The "global economy" has little to do with it... the "global market" is more important. It would be as though Florida had nice housing for $2000 per house, $500 cars, and $0.02 vending machines. There is no similarity in costs between India and the US, so there is no shared economy.

Your point? If I invented a way to create diamonds for incredibly cheap, would you say that the present monopoly should be protected so that they aren't destroyed?

What does protecting a workforce from a trade imbalance have to do with protecting a monopoly from competition? There is a way to make very cheap diamonds (two in fact). What I am saying is that Americans should be protected from outsourcing American jobs to vastly uneven economies without some level of equalization.

Lower competition raises prices. In America, there is less competition if there are protective rules, which is why labor is so much more expensive.

Labor is so much more expensive because one cannot eat on $1000 per year over here; much less expect to sleep indoors.

Furthermore, the standard of living is higher. Why should you force firms to higher more expensive labor, harming their output and forcing consumers to pay higher prices?

Because it promotes the general welfare.

If India can produce labor cheaper than America can in a given market, why can't we import it?

Obviously we currently can.. that's the problem.

What if American could produce GPS guidance systems cheaper than anyone else. Should they protect their GPS guidance system markets to avoid a flood of American GPS guidance systems?

Again, not a valid comparison. Find someone signifigantly disadvantaged at it, and you'll find someone who regualtes imports of it.

No. This harms the global economy.

No, the collapse of the American economy harms the global economy. So we loose 20,000,000 IT and service Jobs to India and 15,000,000 manufacturing Jobs to Malaysia and the US economy collapeses and unemployment soars to 30% as one state and national govenrment after another collapses from fiscal failure... Of course, the European and Japanese markets go with us (the formore mostly propped up by us as it is), since they have both the same competition problem and since we are their big customer.... This, of course, removes the entire consumer base for those afformentioned services and manufactured goods destroying any progress made in Indian and Malaysian economoies.

MA is right, you are simply arguing "everything is good" as though economic collapses don't happen... they have and they do.

The economy as a whole and each country individually benefits from free trade because of comparative advantage.

Let me try to point this out again THE US HAS NO COMPARATIVE ADVANTAGE. That's the problem. That's what it means to have a large trade deficit.

Closing economies raises prices on many markets, causing the consumer to pay more. Since closing an economy lowers demand and lowers supply (as supply would have been higher counting imports), the market is hurt by it overall.

Everyone loosing their jobs does an even better version of hurting the economy.

Why do they have to buy from us?

They don't, that's the problem.

And once again, they have to do something with their dollars.

Watch their trade surplus grow as our economy falls down.

[+Donny]

Sorry for the delay, but I didn't have enough time tonight. I should get to it tomorrow night.

I saw that you spelled my name "donnie" instead of "donny", MisterAgreeable. Don't make me start trouble with you.

[+Donny]

If Canadian wood is cheaper, we benefit. If it's more expensive, we benefit. If out TV manufaturers are driven out of business, it's good for us. If american jobs are lost but companies get stuff cheaper, that's good too. I suspect if our TVs had sold spectacularly in foreign markets, we'd benefit. And if AOL had kept their call centers open, somehow I'd guess you'll explain how that's positive too.

This comment shows either that you have no grasp of economics or that you complete misunderstood my argument. My statement was that when the government interferes with a free international market it harms the national and global economy. I said that we are better off, no matter what the situation, without government interference.

Notice your take on whether or not the Indian employees are paid in rupees or dollars : If we pay them in dollars, it's good for the american economy. If we pay them in rupees, amazingly, that's good for the American economy too. I suspect if we paid them in pesos, rubles, lyria, pounds or kroners, no doubt you'll explain how the US economy comes out shining through the whole thing.

Again, either you don't understand economics or you misunderstood my argument. What I said was that it doesn't matter whether they are paid in rupees or dollars, either way our net export with rise (either through the international currency exchange market or them buying American goods).

In fact, as far as this conversation has uncovered, the only thing you believe can ever harm an economy is government intervention - even if it's to correct an obvious case of market manipulation.

Wrong again and for one of the same two reasons.... I see a pattern here.

Let us go back to the TV issue. Here's Donnie's quote:

1)The only way you can protect against illegal actions like that is if you subsidize or tariff the crap out of goods. As I said, this kills the American economy as a whole and only helps the firms you are directly aiding with the government help. The consumer loss outweighs producer gain in the case of tariffs and subsidies.


Now, bear in mind the following:
1. American TV manufacturers were put out of business because of this. A court agreed with this statement.
2. When it was done, the Japanese TV manufacturers had a monopoly, which they abused.

Would it truly have "killed the American economy" if the US government had corrected the Japanese price, promoted fair competition and prevented a foreign monopoly?

Bear in mind that all the while, the Japanese manufacturers had a monopoly in their own country because significant import tarrifs kept US TVs from competing. This was a seige on a US market, being backed by the Japanese government and consumers, and you feel that it would be wrong for the US government to stop it?

We are talking about blanket protection against all forms of dumping. Can you stop dumping before it happens or must you wait until after harm has been done? What markets do you place under this plan? Since you listed dumping as a bad side effect of not applying tariffs or subsidies, I want to see how you would work to stop international dumping.

Furthermore, dumping happens domestically, too. Do you propose we use the same tactic between states, counties, and cities?

Dumping is not necessarily something that hurts the American company more than others, since the American companies can dump, too. And if this is such a threat, why don't we see more of it?

Finally, it can be remedied simply be stricter penalties against it. Force dumping companies to pay full restitution (putting damaged or dead companies back together) or even force the offending company to shut down. I don't see how government regulation of commerc solves anything.

Let me ask you this, Donnie - in Article I, Section 8 of the U.S. Constitution, Congress was given the power "to regulate commerce with foreign nations." Was that a mistake?

Yes.

The real problem, Donnie, is that you don't have the courage of your libertarian, Laizzes-fair convictions - you want to maintain the notion that unrestrected always does the very best thing for consumers. Every possible outcome I've listed you claim as a benefit - prices can move in either direction, currencies can move either way, we can have trade deficits or surpluses - these are all somehow magically beneficial. Yet, intervention is always harmful.

One of those two magic reasons for your strawman pop up again.

Seriously, you need to abandon the fantasy that unimpeded trade through our borders (even in cases where trade in other nations' borders are skewed to give them clear advantages) is always the most economically beneficial course.

Why? The only argument you put forth against free trade that lasted into this post was the dumping one, which is very weak at best.

Often it is not. You sound ridiculous here - please just stand up like a man and say "I support free trade in all cases, even though at times I understand it can have very bad impacts on the American economy."

Unimpeded free trade from all nations does not hurt the national economy overall. It can hurt individual national markets. Furthermore, when other countries regulate trade, it does hurt the United States. I am saying that the answer is not to impede trade further by having the USA regulate trade, as that will harm it even more.

[+Donny]

There are no "shipping" costs, so "no".

Then apparently I'm missing how your original point about distance was relevant.

The "global economy" has little to do with it... the "global market" is more important. It would be as though Florida had nice housing for $2000 per house, $500 cars, and $0.02 vending machines. There is no similarity in costs between India and the US, so there is no shared economy.

An economy is "a system of producing, distributing, and consuming wealth". Mankiw, in his Principles of Macroeconomics, talks of economics as "the study of how a society manages its scarce resources." You were appealing to different markets (the Indian housing market is different than the American housing market), but not different economies. Actually, your example solidifies my position, as the American economy also has different markets based on region (the California real estate market compared to the Texas real estate market).

What does protecting a workforce from a trade imbalance have to do with protecting a monopoly from competition? There is a way to make very cheap diamonds (two in fact). What I am saying is that Americans should be protected from outsourcing American jobs to vastly uneven economies without some level of equalization.

Why? If other people can do the same thing much cheaper, why shouldn't they be allowed to be hired by American companies without impediment?

Labor is so much more expensive because one cannot eat on $1000 per year over here; much less expect to sleep indoors.

Which is exactly what I say in the next sentence...

Because it promotes the general welfare.

How? By making firms pay higher labor costs, thereby reducing output? By increasing price, so the consumer can buy less?

Obviously we currently can.. that's the problem.

I meant "Why shouldn't we be able to without government restriction?"

Again, not a valid comparison. Find someone signifigantly disadvantaged at it, and you'll find someone who regualtes imports of it.

Sure. Let's say that country X also produces GPS's, but at a higher cost and lower quality. Should they protect their GPS market from Americans?

No, the collapse of the American economy harms the global economy. So we loose 20,000,000 IT and service Jobs to India and 15,000,000 manufacturing Jobs to Malaysia and the US economy collapeses and unemployment soars to 30% as one state and national govenrment after another collapses from fiscal failure...

Please prove that the US economy would collapse in the long run and that these people wouldn't be like everyone else and just get a new job when another worker beats them out for the opening in possibly another market.

Of course, the European and Japanese markets go with us (the formore mostly propped up by us as it is), since they have both the same competition problem and since we are their big customer.... This, of course, removes the entire consumer base for those afformentioned services and manufactured goods destroying any progress made in Indian and Malaysian economoies.

If your theory works, sure, but it doesn't.

MA is right, you are simply arguing "everything is good" as though economic collapses don't happen... they have and they do.

Ah, so I think depressions and recessions don't happen... I should apparently ask you what I think for now on, because I could have sworn I wasn't that stupid.

Let me try to point this out again THE US HAS NO COMPARATIVE ADVANTAGE. That's the problem. That's what it means to have a large trade deficit.

Apprently you don't know what comparative advantage is.... (BTW, off topic, but one of the reasons we have a trade deficit is because of our budget deficit)

You are thinking of absolute advantage. To begin an example, let's say there are two goods, pizza and cowboy hats. Country A can produce a pizza in 4 hours of labor and a cowboy hat in 6 hours of labor. Country B can produce a pizza in 16 hours of labor and a cowboy hat in 8 hours of labor. In this example, Country A has the absolute advantage in both markets.

However, I am speaking of comparative advantage. This is measured by the opportunity cost of producing a good. In Country A, hours can be spent on either cowboy hats or pizza. Therefore, the opportunity cost of producing a pizza is 2/3 of a cowboy hat and a cowboy hat is 1 1/2 pizzas. For country B, the opportunity cost of producing a pizza is 2 cowboy hats, while the opportunity cost of producing a cowboy hat is 1/2 pizza. Thus, in Country B, it is cheaper, when measuring by OC, to produce cowboy hats than in Country A.

Well, how is this relevant? How does this matter to the international market? Wouldn't absolute advantage by the determiner of worth?

No, it wouldn't. This is easily solved using a production possibilities frontier. This is a simple graph measured the possibilities of production, in this case of maximum output. To make the math easy, let's say there are 48 hours to be used. In this case, the hours are really representing cost of input, labor, etc. To make it simpler, we only use one unit, though. Country A can either use all its hours to produce 12 pizzas, all its hours to produce 8 cowboy hats, or something in between. Country B can either use its hours to produce 3 pizzas, all its hours to produce 6 cowboy hats, or something in between. Since we are speaking of the benefits of an open economy, let see what they can produce in a close economy.

Now, based on the hours and costs of production, the countries are limited in what they produce. Lets say that they want around an even split in cowboy hats and pizzas. Country A would then produce, say, 5 pizzas (20 hours), and 4 2/3 cowboy hats (28 hours). Country B would produce 2 pizzas (32 hours) and 2 cowboy hats (16 hours).

For an open economy, however, we see specialization. Citizens of Country A start noticing that though they can trade 1 pizza for 1 1/2 cowboy hats at home, they can get as many as 2 cowboy hats in Country B. Likewise, Country B citizens notice that though they can get 1/2 pizza for 1 cowboy hat at home, they can get as many as 1 1/2 pizzas in Country B. What happens? Country B starts producing more cowboy hats and Country A starts producing more pizzas. Lets say the production turns out like this:

Country A produces 8 pizzas (32 hours) and 2 2/3 cowboy hats (16 hours).
Country B produces 1 pizza (16 hours) and 4 cowboy hats (32 hours).

Now there are 9 pizzas and 6 2/3 cowboy hats in the market, while before there were only 6 pizzas and 6 2/3 cowboy hats. When countries specialization in what they have the comparative advantage in, there are more goods produced universally. It is simply what happens when the market is allowed to work itself out.

Everyone loosing their jobs does an even better version of hurting the economy.

Yes, and these people are incapable of getting another job like everyone else? Should we then make a law saying we can't fire people so we can protect employment? That way no one gets unemployed and everyone can make money!

They don't, that's the problem.

And this is a problem how?

Watch their trade surplus grow as our economy falls down.

Once again, their dollars are either exchanged for rupees, which raises the supply of dollars on the international currency exchange market, making dollars cheaper and American exports more attractive, or they buy our goods.

[MisterAgreeable]

Well, Donny, or plus-Donny, this conversation is getting a little weird. Here's a great big of dialoge. (These are all verbatim quotes, and this is pretty much the way the dialog flowed.)

Donny : I said that we are better off, no matter what the situation, without government interference.
Mr. A. : The only thing you believe can ever harm an economy is government intervention - even if it's to correct an obvious case of market manipulation.
Donny : Wrong again...
Mr. A. : ???

The first statement, that we are always better off without government interference is precisely the claim I made, to which you replied "wrong again." What in the world is going on here?

Basically, the problem is this : you are confusing your personal ideology with practical effects.

For instance, I support the legalization of drugs on the federal level. That's clearly a subject for a different debate, but I think that states should be allowed to set their own drug policies as they wish. Some states will probably be fairly liberal about their drug laws. Meaning some people will legally be able to obtain some stuff that will probably be very bad for them. I am not so naiive as to suggest that those people are better off having taken those drugs, but my ideology says they're better off for having the freedom to do so.

Your argument is comparable to saying that they're always better off if they do or don't take drugs, because the only thing truly harmful is having a government decide for you. But of course that's wrong.

My company works with telephony stuff, so we're very much involved in the call center industry. I've seen real numbers, but they're usually property of our various clients, so I can't use them. I'll offer some estimates.

When all is said and done, moving a call center to India saves a company around 25% of their total costs. Let's use very rough numbers and say that a 500 person call center costs 12 million to run domestically. That means the company saved 3 million dollars. I'll be very generous and say that the telephony costs are going to be a half a million dollars more, which will go to U.S. companies.

Here's a bit of explanation of the numbers. Employees in the U.S. receive wages of $20,000 each, on average. In India it's half that. But, in India there's a much higher turnover rate, so there's a lot more training going on. And they have a far higer tax rate. It's also more expensive to route calls to the other side of the planet, of course, and a few other unique costs of doing business there. Basically increased overhead takes 50% of your savings in raw wages. Unfortunately, almost all of that overhead is in India, not the U.S.

So the company saved $3 million, that's not bad at all. Unfortunately, the U.S. economy lost far more than that. In income tax alone the government lost 1.5 million dollars. If they have to go on unemployment for three months each the government's almost lost as much income as the company saved.

And we haven't even covered the eight or so million dollars per year in income that the employees are no longer receiving.

So, to recap:

Net gain by corporation : 3 million
Gain in business by telephone infrastructure providers : 500k

Loss by federal government : 2.7 million
Loss to U.S. workforce : 8 million

This is in no way a win for the economy. If you feel that the situation is better somehow, that's one of your own personal ideology. That's really all you seem to have to argue here.

Again, either you don't understand economics or you misunderstood my argument. What I said was that it doesn't matter whether they are paid in rupees or dollars, either way our net export with rise (either through the international currency exchange market or them buying American goods).

How does that follow? Why will india buy American goods vs. any other if they had the chance? Dollars are ubiquitous all over the world - they're basically a second currency in India, yet only around 10% of India's imports are from the U.S.

Donnie, on dumping...
We are talking about blanket protection against all forms of dumping.

...

Finally, it can be remedied simply be stricter penalties against it. Force dumping companies to pay full restitution (putting damaged or dead companies back together) or even force the offending company to shut down. I don't see how government regulation of commerc solves anything.

Well, very good. That's our federal government using its powers to regulate foreign commerce. Glad to see that you're seeing things my way.

[Ibanezadro]

G'day

Im and aussie yr 12 student studying econs.

Free trade IS beneficial.

I'm tired,

Comparative advantage is basically the main reasons, some people/countries have better productive factors, Australia produces wheat better than it does coffee, we export/import

Opportunity cost is reduced

If ya need further clarification im happy,

cya all
adrian

[JerryLove]

OK. Tell me how an economy upon whom the stability of the world economy depends loosing 20% of its product and going into untennable deficit, going into a depression and collapsing is a good thing.

Or are you saying "since I'm in high-school, you should ignore that I've offered no support for my claim and just believe I'm right"?

[+Donny]

Well, Donny, or plus-Donny, this conversation is getting a little weird. Here's a great big of dialoge. (These are all verbatim quotes, and this is pretty much the way the dialog flowed.)

Good, you spelled it right. I would give you a cookie, but I can't cook.

Donny : I said that we are better off, no matter what the situation, without government interference.
Mr. A. : The only thing you believe can ever harm an economy is government intervention - even if it's to correct an obvious case of market manipulation.
Donny : Wrong again...
Mr. A. : ???

The first statement, that we are always better off without government interference is precisely the claim I made, to which you replied "wrong again." What in the world is going on here?

No, you said that the country would be better off no matter what. I didn't say that. The country can get worse off if certain things happen to markets and foreign governments. However, no matter the situation, it always gets worse if our government interferes with the market.

Basically, the problem is this : you are confusing your personal ideology with practical effects.

For instance, I support the legalization of drugs on the federal level. That's clearly a subject for a different debate, but I think that states should be allowed to set their own drug policies as they wish. Some states will probably be fairly liberal about their drug laws. Meaning some people will legally be able to obtain some stuff that will probably be very bad for them. I am not so naiive as to suggest that those people are better off having taken those drugs, but my ideology says they're better off for having the freedom to do so.

Your argument is comparable to saying that they're always better off if they do or don't take drugs, because the only thing truly harmful is having a government decide for you. But of course that's wrong.

No. I have blatantly said that if foreign governments interfere, it harms us. There are many things that can harm us. Our government "protecting" us harms us more though.

Compare it to the government forcing everyone to take cocaine. Sure, other bad things can happen, but when the government forces everyone to get on crack, it makes it even worse. Obviously an extreme example, but you know what I meant.

My company works with telephony stuff, so we're very ]much involved in the call center industry. I've seen real numbers, but they're usually property of our various clients, so I can't use them. I'll offer some estimates.

When all is said and done, moving a call center to India saves a company around 25% of their total costs. Let's use very rough numbers and say that a 500 person call center costs 12 million to run domestically. That means the company saved 3 million dollars. I'll be very generous and say that the telephony costs are going to be a half a million dollars more, which will go to U.S. companies.

Here's a bit of explanation of the numbers. Employees in the U.S. receive wages of $20,000 each, on average. In India it's half that. But, in India there's a much higher turnover rate, so there's a lot more training going on. And they have a far higer tax rate. It's also more expensive to route calls to the other side of the planet, of course, and a few other unique costs of doing business there. Basically increased overhead takes 50% of your savings in raw wages. Unfortunately, almost all of that overhead is in India, not the U.S.

So the company saved $3 million, that's not bad at all. Unfortunately, the U.S. economy lost far more than that. In income tax alone the government lost 1.5 million dollars. If they have to go on unemployment for three months each the government's almost lost as much income as the company saved.

And we haven't even covered the eight or so million dollars per year in income that the employees are no longer receiving.

So, to recap:

Net gain by corporation : 3 million
Gain in business by telephone infrastructure providers : 500k

Loss by federal government : 2.7 million
Loss to U.S. workforce : 8 million

This is in no way a win for the economy. If you feel that the situation is better somehow, that's one of your own personal ideology. That's really all you seem to have to argue here.

In the short run, it obviously hurts. Once those workers get working again, in the long run, it helps (since both the negative affects are then gone).

How does that follow? Why will india buy American goods vs. any other if they had the chance? Dollars are ubiquitous all over the world - they're basically a second currency in India, yet only around 10% of India's imports are from the U.S.

The increased supply of dollars on the currency exchange market decreases the price of dollars, making american goods more attractive.

Donnie,

....... you....

on dumping...

*giggles*

Well, very good. That's our federal government using its powers to regulate foreign commerce. Glad to see that you're seeing things my way.

Next thing I know you will be telling me that I support protectionism because I think porn should be illegal...

OK. Tell me how an economy upon whom the stability of the world economy depends loosing 20% of its product and going into untennable deficit, going into a depression and collapsing is a good thing.

Or are you saying "since I'm in high-school, you should ignore that I've offered no support for my claim and just believe I'm right"?

Funny, because you offered no support for your claim that free trade would put us into a depression and have failed to adequately refute my argument (rehearsed by Ibanezadro and the vast majority of economists) from comparative advantage.

[MisterAgreeable]

Originally Posted by +Donny

However, no matter the situation, it always gets worse if our government interferes with the market.

You haven't even attempted to back this one up, you just keep saying it, hoping someone will buy it.

If you want to make unsubstantiable assertions, at least have the good sense to admit that you are arguing ideology and not facts.

No. I have blatantly said that if foreign governments interfere, it harms us. There are many things that can harm us. Our government "protecting" us harms us more though.

Oh yes, you've said it. You've said it many times.

But where's that evidence again?

On American job loss...

In the short run, it obviously hurts. Once those workers get working again, in the long run, it helps (since both the negative affects are then gone).

Well that's putting a positive spin on things.

"Job loss is a good thing! Because those people will have to go and get new jobs eventually! See? Everyone wins."

Oh, and apparently your buddy President Bush agrees that this is a problem.
http://story.news.yahoo.com/news?tmp..._pe/us_china_4

[+Donny]

You haven't even attempted to back this one up, you just keep saying it, hoping someone will buy it.

that is ridiculous. I have offered several different arguments, mainly centering on the argument from consumer-producer surplus, which you have failed to refute.

If you want to make unsubstantiable assertions, at least have the good sense to admit that you are arguing ideology and not facts.

I know the difference and I have argued from facts, as consumer-producer surplus is based on a very factual graphing of the supply and demand curves.

Oh yes, you've said it. You've said it many times.

But where's that evidence again?

Try my numerous unrefuted claims. Remember that you ended up responded to one of my long posts with the assertion that I was claiming "everything is better no matter what". That rebuttal failed, so my previous arguments still stand.

Well that's putting a positive spin on things.

"Job loss is a good thing! Because those people will have to go and get new jobs eventually! See? Everyone wins."

.....Please tell me you are joking.....

If you aren't, this is the worst rebuttal I have seen you make yet. Nothing i said suggested job loss itself was a good thing. You are reading such ridiculous ideas into my arguments that I am not only offended, but convinced that you are either ignorant of economics, not reading my posts, or intentionally strawmanning my position. Only a complete slobbering moron would say that unemployment is good because people must get new jobs. It simply makes absolutely no sense whatsoever.

However, when more expensive workers are replaced with less expensive workers, even when those cheaper workers are foreign, it is good for the economy, as those companies now can lower prices and increase output and those fired workers go on to get new jobs. That is the basis for the market. Those who cannot compete are beat out and must find a way to compete or move to a new market. This constantly increases the output of markets. Yes, american markets may slow down or even be eliminated for times, but in the long run, markets will develop better and cheaper goods and countries will become more specialized in their production. This only happens through the market. If we hinder it, we hinder the very mechanism of supply and demand that drives us to better standard of living. Sure, you can protect our nation from the outside, but you will have to watch as our standard of living, slowly at first, drops below that of nations with open markets because of the decrease in competition, incentive, supply, and demand. Don't respond to this post unless you are prepared to actually address the economic issues here and go beyond ridiculous strawmanning/stupidity.

Oh, and apparently your buddy President Bush agrees that this is a problem.
http://story.news.yahoo.com/news?tm...t_pe/us_china_4

I don't need to read the article, as Bush's opinion is completely irrelevant to the present discussion. Please concentrate on the actual issues.

[+Donny]

Oh, and in addition to my other arguments, I'll further argue on the basis of international cyclic/natural unemployment. As firms can hire more internationally, the world becomes more linked economically. Any economy has what is called cyclic/natural unemployment, which is the unemployment caused by people moving from job to job. This is always going to be present when workers are free to sell their services to the highest bidder and is evidence of smart supplies of labor, who will not just take whatever is offered to them. In the international arena, the same will happen. As workers are fired or quit and look for better jobs, there is unemployment. Just as in national cyclic unemployment, there will be regions where this will termporarily be higher than in others. Since American workers are being beat out by foreign workers, they become unemployed, having to sell their services cheaper or sell different services. This level of unemployment is always present if suppliers of labor are allowed to choose who they sell their labor to and firms are allowed to choose who they buy their labor from. As is the case in the second argument I made above, the market's natural unemployment itself does not inherently help the economy, but it is caused by something that is very good: competition. You can't cut natural unemployment away without taking away competition, and to take away competition is terrible, which is what I addressed above.

[MisterAgreeable]

Originally Posted by +Donny

that is ridiculous. I have offered several different arguments, mainly centering on the argument from consumer-producer surplus, which you have failed to refute.

No, that's just not the case. Your arguments have a few problems. One, you assume that the same supply and demand formulas are applicable to any market. Thats simply not the case.

The only case where you can try to use such simple economics are with commodity items, where it really doesn't matter which supplier or manufacturer you buy from. But we know that's not the case with televisions or labor.

Secondly, you make some painfully erroneous assumptions about the effects of having the United States' economy so tightly linked with foreign economies. More on that later.

I know the difference and I have argued from facts, as consumer-producer surplus is based on a very factual graphing of the supply and demand curves.

See above. I'll take your simplistic one-size-fits-all view of economies seriously if we start talking about coffee beans or barrels or oil, or to use your fancifule example, cowboy hats and pizzas. You make such bold claims as "It has been shown that free trade will benefit a country every single time" yet when it comes time to substantiate it, you offer not numbers, not historical evidence, but a surplus of mere assertion.

.....Please tell me you are joking.....

If you aren't, this is the worst rebuttal I have seen you make yet. Nothing i said suggested job loss itself was a good thing. You are reading such ridiculous ideas into my arguments that I am not only offended, but convinced that you are either ignorant of economics, not reading my posts, or intentionally strawmanning my position. Only a complete slobbering moron would say that unemployment is good because people must get new jobs. It simply makes absolutely no sense whatsoever.

...and...

Don't respond to this post unless you are prepared to actually address the economic issues here and go beyond ridiculous strawmanning/stupidity.

Charming, Donnie, to see you throw such a tantrum over the fact that your points are hopelessly unsupported. I can understand your frustration at having someone actually doubt the economic dogma that you are so obviously attached to, but try to keep the ad-hominems in junior-high. You are out of junior-high, yes?

However, when more expensive workers are replaced with less expensive workers, even when those cheaper workers are foreign, it is good for the economy, as those companies now can lower prices and increase output and those fired workers go on to get new jobs. That is the basis for the market. Those who cannot compete are beat out and must find a way to compete or move to a new market. This constantly increases the output of markets. Yes, american markets may slow down or even be eliminated for times, but in the long run, markets will develop better and cheaper goods and countries will become more specialized in their production. This only happens through the market. If we hinder it, we hinder the very mechanism of supply and demand that drives us to better standard of living. Sure, you can protect our nation from the outside, but you will have to watch as our standard of living, slowly at first, drops below that of nations with open markets because of the decrease in competition, incentive, supply, and demand.

And here we see the most significant flaw in your arguments.

One stated goal of our government is to "promote the general wellfare... [of] the United States." One particular means that Congress has to further that goal is the regulation of foreign trade. (The granting of which by our founding fathers you, arrogantly, claimed was a mistake.)

And part of the promotion of general welfare is preserving our standards of living. For better or worse, we are the richest nation on the planet, and few would argue that the U.S. would benefit from having its per-capita economic output move towards that of India. But that's exactly what happens when we allow the unimpeded transfer of jobs to places like India in such a way that the U.S. economy or government receives no benefit.

We both acknowledge that the displaced call-center workers whose jobs were moved to India now need to become more competitive in the marketplace to regain work. For most jobs, by far the best way to be more competitive is to work for less money. With Indian competition, though, you are in direct competition with employees who make wages which would be impossible to live on, and possibly illegal, in the United States. This is not foreign competition like it has traditionally been, where there is economy-boosting overhead in the transfer of these jobs. You're not buying parts which have to be shipped, for instance. There are no factories to build.

Any job which can be done on the phone or on a computer is in real jeopardy of moving overseas. Programmers, call center operators are the two most high-profile ones. But there are far more. Medical transcriptionists, economists, accountants, circuit designer, copy-writers, sales, etc. These are efforts to move all of these jobs overseas.

A figure that I've seen used by both conservative and liberal economists is that 30% of American jobs now face a real risk of being moved overseas. The Unites States' economy has been rapidly transforming into an information and service based economy, and that change was brought about by a great deal of public and private investments. We are now facing the possibility that those investments will be used to undermine our own economy by moving jobs offshore in bulk.

The economic policies Donnie suggests will only help to redistribute the wealth that middle class America enjoys throughout the third world. India will benefit, and American corporations will see only short-term benefits, which will come to a close because of the mass-exodus of moderate paying American jobs. It will become increasingly clear that moving American jobs to the third world will simply move America that much closer to the third world itself.

[+Donny]

Originally Posted by MisterAgreeable

No, that's just not the case. Your arguments have a few problems. One, you assume that the same supply and demand formulas are applicable to any market. Thats simply not the case.

The only case where you can try to use such simple economics are with commodity items, where it really doesn't matter which supplier or manufacturer you buy from. But we know that's not the case with televisions or labor.

Tell me how this is relevant to the discussion.

See above. I'll take your simplistic one-size-fits-all view of economies seriously if we start talking about coffee beans or barrels or oil, or to use your fancifule example, cowboy hats and pizzas. You make such bold claims as "It has been shown that free trade will benefit a country every single time" yet when it comes time to substantiate it, you offer not numbers, not historical evidence, but a surplus of mere assertion.

I described a graph. Graphs aren't enough? I could give numbers if I had the ability to calculate them.

Charming, Donnie, to see you throw such a tantrum over the fact that your points are hopelessly unsupported. I can understand your frustration at having someone actually doubt the economic dogma that you are so obviously attached to, but try to keep the ad-hominems in junior-high. You are out of junior-high, yes?

Then stop strawmanning.

And here we see the most significant flaw in your arguments.

One stated goal of our government is to "promote the general wellfare... [of] the United States." One particular means that Congress has to further that goal is the regulation of foreign trade. (The granting of which by our founding fathers you, arrogantly, claimed was a mistake.)

Not arrogantly, since it is based on the opinion of the majority of economists.

And part of the promotion of general welfare is preserving our standards of living. For better or worse, we are the richest nation on the planet, and few would argue that the U.S. would benefit from having its per-capita economic output move towards that of India. But that's exactly what happens when we allow the unimpeded transfer of jobs to places like India in such a way that the U.S. economy or government receives no benefit.

Prove this.

We both acknowledge that the displaced call-center workers whose jobs were moved to India now need to become more competitive in the marketplace to regain work. For most jobs, by far the best way to be more competitive is to work for less money. With Indian competition, though, you are in direct competition with employees who make wages which would be impossible to live on, and possibly illegal, in the United States. This is not foreign competition like it has traditionally been, where there is economy-boosting overhead in the transfer of these jobs. You're not buying parts which have to be shipped, for instance. There are no factories to build.

Any job which can be done on the phone or on a computer is in real jeopardy of moving overseas. Programmers, call center operators are the two most high-profile ones. But there are far more. Medical transcriptionists, economists, accountants, circuit designer, copy-writers, sales, etc. These are efforts to move all of these jobs overseas.

A figure that I've seen used by both conservative and liberal economists is that 30% of American jobs now face a real risk of being moved overseas. The Unites States' economy has been rapidly transforming into an information and service based economy, and that change was brought about by a great deal of public and private investments. We are now facing the possibility that those investments will be used to undermine our own economy by moving jobs offshore in bulk.

Yes, I have agreed that American workers would be pushed out of supplying for these markets. So what happens? They move to other markets, increasing the supply of labour there. So what is the net long run effect? An increased supply of human capital, increasing national output, and increased international specialization toward comparable advantage, which increases international output.

The economic policies Donnie suggests will only help to redistribute the wealth that middle class America enjoys throughout the third world. India will benefit, and American corporations will see only short-term benefits, which will come to a close because of the mass-exodus of moderate paying American jobs. It will become increasingly clear that moving American jobs to the third world will simply move America that much closer to the third world itself.

And your proof for this aside from your assertion of it?

[Jeff]

"moving us that much closer to the third world"

and that much closer to a place where corporations have power over people that cannot be restricted by government, since, of course, these international corporations have more financial and political power than national governments. Governments are meant to have your well being at heart. Corporations want the most work out of you for the least cost. Do you really want to go back to the way things were when we found the new world? or during the industrial revolution? The problem in third world countries is not that corporations are not strong enough to guarantee the well being of their workers with a large product and *eventually* an increase in efficiency. The problem is that the real savings companies see will never be seen by the common person either in india or the United States. By homogenizing the standard of living through free trade, you also lower the average standard of living throughout the world not only by the difference in the United States, but the difference deregulation causes when corporations are able to set any labor standards they want since they can hire in any country, and people who don't want to work like Indians can't compete.