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Maybe Working-Class Trump Voters Aren’t Racist, But They Are Comcast…

November 16th, 2016 · 2 Comments
Trade

Trying out a new platform here…so far so good I think? At least it’s more productive than screaming into my poop emoji pillow, which is the other thing I’ve been doing lately.

Maybe Working-Class Trump Voters Aren’t Racist, But They Are Comcast
by Jodi Beggs

It’s only been a week since the country was rocked by a seemingly improbable election result, and we are seeing an unprecedented level of protest and anger at both Donald Trump and those who voted for Trump. Much of the protesting appears focused on social and civil rights issues, which have been discussed fairly extensively in the media. (Personally, I think this guy has got my feelings covered.) In addition, there are many think pieces expressing frustration over how Trump voters either aren’t going to get what they voted for or won’t actually be helped by it. I certainly concur with these sentiments, but I also have my own economist-y reasons for being irritated with at least a particular subset of Trump voters. Allow me to explain via an analogy…

Source: Medium

Hope you enjoy my rage. =P

Tags: Trade

2 responses so far ↓

  • 1 Jeff // Nov 17, 2016 at 2:35 pm

    Ok. Apologies, but this is a bit of a hot button.

    So, first of all, let me commend you for putting in a plug for universal basic income. It is not apparent that we need this now, but 30 years from now (or less!) when an engineer can’t write code as well as a machine everybody will be asking why it wasn’t obvious 30 years ago. In truth, it is obvious today, but like the pot which slowly heats few people are sounding an alarm that the next industrial revolution will be bigger than the one that brought us from over 50% farmers to under 4% farmers.

    That out of the way, the GM example you cite is the best possible example the free trade lobby can bring up.
    * It chooses restrictions over tariffs. Across the board tariffs are better precisely because they allow removal of some of the inefficiencies you describe.
    * It describes protecting established industries instead of fledgeling industries. If you think this doesn’t matter consider that Brazil was well ahead of South Korea in 1950 but South Korea protected its fledgeling industries and today you can buy a Kia or Samsung in every city around the globe. Brazil must really be kicking itself.
    * The discussion completely ignores the issue of trade imbalance, which is especially ironic because the example taken was from right about the time of the Reagan Rocket Launch of our trade imbalance levels. This was allegedly part of the same process as the process that converted us from “real” economy to “financial” economy, and as we saw in 1929, the financial economy is the economy that can go away very very fast in the event of a crash we don’t handle properly.
    * The discussion fails to account for the wages that would have been lost by job cuts. It is pretty easy to justify criticism of emergency measures when you remove the impact of what would have happened without the emergency measures in your calculation.

    It is possible that the correct solution was for the US automakers to go out of business based on a more complete analysis of the tariffs situation. This is why most proponents of tariffs would recommend a flat tariff rate that allows for correction of overall imbalances across the board while still punishing companies that are not efficient enough. But at the same time, Detroit is basically the Silicon Valley of the 1940s. It is not just car companies but an entire network of producers and consumers that depend on each other. The very least we should ask from a tariff system is a buffer that will allow change to happen slowly rather than earthquake-style.

    The article attached is one example of what I consider a bad habit of economists – madly pursuing local production efficiency increases and writing QED under them. The thinking basically goes: Dillards –> Walmart: QED.

    Our economy exists based on millions of customers with dollars in hand bouncing up against millions of sales opportunities representing marginal production/service opportunities. Any chemist knows that the rate of a reaction is determined by the rarer ingredient. As a general rule, a production efficiency increase will decrease the dollars available in consumer hands while increasing the marginal production opportunities, which possibly can contribute to growth, but it doesn’t have to.

    I have a huge respect for the general mission of education and I also enormously respect the bringing of humor to the job, but I feel that we cannot let some of the damaging neoliberal teachings stand unquestioned. This is a recipe for disaster and unfortunately we have already seen this disaster strike.

    In 2003, we came in and deposed Saddam Hussein and there was a short period of peace (with a few small exceptions probably related to us firing into a crowd of peaceful protesters in Fallujah and similar incidents without recourse given). Then we fired hundreds of thousands of people from government jobs and brought the business community together and told them they were dropping tariffs to zero and that they would have to compete with the Walmarts of the world on equal footing from day one. The business leaders said that they would not survive such competition and L Paul Bremer characteristically said, “That’s right. Most of you won’t survive.”

    Shortly after that a civil war broke out and our right-wing press carried the story that the civil war happened because we went in to depose Saddam Hussein and war is the natural result of deposing a dictator when you are dealing with “people like that”.

    As a person I really like you a lot but we need to get the truth out. Great Briton was the Queen of tariffs and trade barriers from the 1400s to the 1700s, and became the world leading power. Then they got free trade religion in the 1800s while the US had the highest tariffs in the world under Hamilton’s guidance and we took away Briton’s mantle as world leader. The US got free trade religion in the 1950s and now China is in the process of becoming the next US while we experience decades of stagnation. The sad thing is it doesn’t have to happen this way.

  • 2 Jerry F // Nov 18, 2016 at 2:34 am

    I have to agree with Jeff as his arguments are excellent. Consider the Carrier Corp who moved 1500 jobs from Indianapolis to Mexico. Based on our standard GDP formula, we lose the output of that plant when they produce in Mexico and we also lose a 2nd time if any of those units are imported back to the US. Thus GDP per capita ( reflecting our wealth) tells the story. Adding a tariff ( assuming regulation costs are the same ) may make a big impact in reversing the negative effects.

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