Saturday, December 10, 2016

The Benefit of Trade Is the Import; The Cost Is the Export

Well yes and no. The benefit of all trade is the degree to which that trade stimulates employment.  That has been habitually ignored.  Clearly this is important however the numbers balance out.  Some industries such as the auto industry have a huge tail after the actual manufacture.  This even more so in the rag trade where a ten dollar import costs spins fifty dollars in distribution costs.

The reality is that we must generally balance trade and minimize government surcharges lest we create future difficulties.

The error has been to ignore the employment aspect of a given trade component.  From a National policy viewpoint, employment generates tax revenues far beyond the any thing else unless it is a fortunate royalty windfall...

The Benefit of Trade Is the Import; The Cost Is the Export 

Wednesday, November 30, 2016

t he benefit of trade is the import; the cost is the export. 

Politicians just don’t seem to get this. President Obama’s official statement on “Promoting U.S. Jobs by Increasing Trade and Exports” mentions exports more than 40 times; imports, not once. His Republican critics agree: Sen. Rob Portman says that a trade agreement “is vital to increasing American exports.” More colorfully, during the 1996 presidential campaign, Pat Buchanan stood at the port of Baltimore and said, “This harbor is Baltimore is one of the biggest and busiest in the nation. There needs to be more American goods going out.”

That’s fundamentally mistaken. We don’t want to send any more of our wealth overseas than we have to in order to acquire goods from overseas. If Saudi Arabia would give us oil for free, or if South Korea would give us televisions for free, Americans would be better off. The people and capital that used to produce televisions – or used to produce things that were traded for televisions – could then shift to producing other goods.

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