When are Americans going to BUY AMERICAN?

I've been lurking here for a week or so, and I feel compelled to make a post. As someone with a degree in economics, it pains me to see so many people who don't realize that free trade benefits Americans. I'm not sure if anyone here has taken an economics course, or would be interested in a minor course in economics and the benefits of free trade, but I'd be glad to teach a little, starting with "comparative advantage,"

Comparative advantage, generally defined as the ability to perform a given task at a lower cost (relative to another country or person, not necessarily in absolute terms), is one of the first concepts (if not the first concept) one learns in an international trade course. It makes sense for countries to specialize in what they are relatively good at and import what it another country is relatively better at. If you go to your favorite search engine and look up "comparative advantage" you can learn about it more indepth.

If anyone else wants to learn a little more the economics of free trade, the next step would be to learn about "opportunity cost" which is another very important economic concept. If no one else cares, I'll just go away

 

Don't go away. I'd like to hear it. As you said, from the comments on the board, a lot of people need to hear about it.

 

ok

Lessson 2: Opportunity Cost

Opportunity costs are what is given up in order to do an activity, or produce a good, not just in terms of money. For example, the opportunity cost of going to the movies whatever you could have done with the money (including the price of gas) or time instead. Quality time with family, a few pizzas, study time, or extra sleep are possible opportunity costs for this example. Everything has an opportunity costs, and all costs are opportunity costs.

In my previous post, mentioned comparative advantage relative to another country or person (remember, comparative advantage only refers to different individuals performing the same task, not to a single individual performing two different tasks!). This is where opportunity cost comes in. Comparative advantage is measured in forgone opportunities (opportunity costs).

Take two people: an electrician and a carpenter. The electrician can rewire a house in 10 hours, and panel a house in 15. The carpenter can rewire a house in 20 hours, and panel a house in 18. While the electician has an absolute advantage in both, the carpenter has a relative advantage in paneling.

The opportunity cost for the electrician for rewiring: 2/3 of a paneling (in 10 hours he could have done 10/15, or 2/3 of a paneling) and, for paneling: 3/2 rewirings.
The opportunity cost for the carpenter for rewiring: 10/9 panelins and, for paneling, 9/10 of a paneling.

In this example, as I noted, the carpenter has a relative advantage in paneling. It costs him 9/10 or a rewiring as opposed to the 3/2 of a rewiring for the electrician. His opportunity costs are lower.

Comparing times with and without trade:

It would take the electrician 25 hours to panel and rewire a house, and the carpenter 38 hours, without trade. With trade, it would take the carpenter 20 hours to rewire both houses, and the carpenter 36 hours to panel both. With free trade both people are better off.

Everyone can be made better off whenever each concentrates in his area of comparative advantage and then trades for the goods he wants to have.

Though I will add that I prefer to buy items, especially food items, locally whenever possible, for environmental, not economic, reasons. If you really want to help America prosper, instead of worrying about buying American, funnel your money into giving kids better educations and health care.

 

"That certainly didn't benefit the generations of American steelworkers in any fashion, just threw grandfathers, dads, and sons out of work with no other industry to turn to, just unemployment."

Which is why people need a better education. So they can get a better job.

"Some of the steel mills are still sitting here rusting in this valley from 25 years ago. People lost homes, lost families, moved away. And to this day are STILL bitter! So that's one case where it isn't true. Japanese steel did not benefit the American worker."

Perhaps it didn't benefit them, but, on average, there is a net benefit through lower prices for steel, and lower prices for goods manufactured with steel.

"Another case is the article I posted about small farmers in Florida. NAFTA was supposed to help them. All it did was drive them out of business and the only people making any money are the large corporations."

I'm not sure what to say there, because of the lack of details, but I can assume that consumers are getting better prices otherwise the farmers wouldn't have gone out of business. Again, putting money into better education, even adult education, would help them find new jobs. I vaguely remember seeing a suggestion that, whenever a good that was previously made by an American worker, but is supplied by foreign countries, a small amount of it (but still less than the original) could set aside to aid the out of work American workers. I, personally, think that's a good idea. I'd get the same good at a better price, and the displaced workers would be compensated while looking for a better job/getting a better education. From what I remember, it would only be a small cost per item (but still below the price before trade) to give each unemployed worker the same income. I might try to look this up for more details, but I don't have much hope.

"My opinion is that all of this may look good on paper, but in the real life scenario, it is a house of cards."

It can be, mostly in the interim. I knew I should have put that "everyone can be made better off" was a general fact, not abosolute fact.

"So, will you please explain more and how this relates to the examples I mentioned. (I promise I won't bite, because I really want to know.)"

I think I did, but I'll just add that with changes in international trade, there will inevitably be displaced workers. This is where education comes in. This also should be where Americans pull together to help the unemployed workers better themselves and find a new job. And, with the suggestion I read, it's possible to, at least in some cases, get lower prices and not leave the former workers stranded. But for that to happen, people will have to be a bit more generous.

"See my friendly smile: [Big Grin] Thanks. [Smile]"

At least until you realize I'm a liberal. Or until I tell you I disagree with just about every post of yours I've read. I'm supremely confident that there isn't a seminal or innovative idea in any one. And if you can tell me what recent movie a very similar line was given, I'll give you a gold star. My handle (or whatever you call it) should give you a clue.

For my original ideas, they will be forthcoming (assuming I think of any good ones) if I don't get banned in the interim.

 

hmmmm.. I'm going to have to learn how to use the "quote" code.

 

Like I said: NAFTA = Nothing American For The American, or better known as SHAFTA

 

That's fine, but I don't much care. What education do you have in this topic to make an educated opinion? Let's really look at some facts.

I did a paper on this very subject for International Trade.

Sorry, no. I could just as easily have given a consumer goods example (say, one farm's opportunity cost for an apple is 2/3 of an orange, and another farm's opportunity cost for an apple is 10/9 of an apple). The underlying principle is the same.

Most of your other "objections" are merely throwing the baby out with the bath water. Fix the problems, don't abandon free trade.

Mostly irrelevant. Some workers, perhaps even many, will be displaced. What you should be looking at is the net benefit. I have no idea where your source got their information. NAFTA at 8 A Foundation for Economic Growth White House Fact Sheet on NAFTA USTR Benefits of Trade

Some cold hard facts: "In the United States, employment supported by merchandise exports to NAFTA countries grew to an estimated 2.9 million jobs up over 914,000 jobs since 1993 – with these jobs paying between 13 and 18 percent more than the average U.S. national wage."

"U.S. Trade Representative Robert B. Zoellick announced today the release of USTR materials documenting how the two major trade agreements of the 1990s -- the North American Free Trade Agreement (NAFTA) and the Uruguay Round -- have been responsible for annual gains of between $1,260 and $2,040 for the average American family of four."

I don't have socialist leanings. I just have this quirky idea that those who are prospering should help those who aren't. And that includes those who benefit from free trade helping those who are harmed by it. There are often victims in a capitalist system. While I do pick capitalism over socialism, I still think we should help our fellow human beings, and frankly I don't much care if those fellow human beings happen to be citizens of the same country as me. No person is better than another. If that's socialism, fine by me. I'll call it "compassion" however.

You can try to throw the baby out with the bath water if you want. I, for one, would rather fix the problems, which would benefit more than just Americans. Mexicans deserve untainted foods just as much as Americans do.

So.. have a nice life, take a few economics courses, look at more sources...

Oh, by the way, some of your comments are very strange things for a "Christian" to say.

 

Um.. no. I was actually referring to your liberal/socialist comment directed to me. Actually, I said that mainly because of your comment posted August 07, 2002 09:38 PM in "Koran a part of College Studies" which said "Strange comment for a "Christian" to make, IMO."
I wanted to see your reaction at having your own words directed back at you. Does this mean you, too, were a venomous snake? That you got nasty?

Yes, actually I did. I said getting rid of free trade because of it would be throwing the baby out with the bath water You also haven't even begun to show that getting rid of free trade would solve those problems. Those are the problems I mentioned that need to be fixed, and abandoning free trade is not the solution. Human rights, child labor, and environmental laws could be worked into the trade agreements. FREE TRADE 101 addresses this very point. "How exactly does it help homeless children to take away their jobs? Forcing Nike to throw them on to the streets isn't going to hurt the company much. But it could be the difference between life and death for the kids."

Does my position really not have substance? Re-read my cold hard facts from my previous post. An extra 914,000 jobs that pay between 13-18 percent more through exports to NAFTA countries. "annual gains of between $1,260 and $2,040 for the average American family of four." through free trade. Yet my position that free trade is good for the average American doesn't have substance?

Did you really refute my "faulty" premise? Let's see, you listed some problems that aren't even fixed by abandoning free trade, and can be solved with better free trade agreements. No, not a refutation. You said some people will be out of work. We can help those displaced workers get a job or a better education through the benefits of free trade, which I mentioned above, more jobs and better pay in the export center. Some people will suffer, but there still is, as I stated in the last post, a net benefit. The economic benefits from free trade outweigh the loss of income of all the displaced workers, enough so they could be compensated and have the average American get cheaper prices. Didn't I all ready cover this? I've all ready offered a solution to this problem. So no refutation there.

That's why I keep saying you're throwing the baby out with the bath water. Your "solution" to these problems is to simply abandon free trade (which, by the way, you still haven't shown to be a solution to half the problems you mentioned, or that the "solution" isn't, in fact, worse than the problem). Mine is to keep free trade for it's benefits (benefits I all ready mentioned) and work from there to minimize the costs through subsidizing displaced workers and the free trade agreements.

I dealt with this all ready. It can work in paper and in real life with some modifications.

And why would we? It's off topic.

Aaaah.. so your similar quote was you being nasty for a darn good reason? As a matter of fact, I've read you say things in the same vein more than once, such as that's something you'd expect an atheist or agnostic to say. Yet you get mad at someone who does the same thing you do to others.. Heh.. Perhaps you'll remember this next time you get it into your head to do the same.

Off topic, irrelevant, etc. I'm not anti-American. As a matter of fact, my mother's an American. Actually, I have American citizen ship too. Did you know that if an American has a child in Canada, the baby has dual citizenship? Oh, and Canada has been FEEDING THE WORLD too

Still unsubstantiated, besides the sources you mentioned of questionable validity.

 

I was in that great bastion of American capitalism just yesterday, WAL-MART!. You are hard pressed to find anything in that store that is not made in China.
Have you ever been in any of these "dollar stores" Nothing but Chinese schlock.

 

If you don't want to buy things at Wal Mart, don't. If you don't like the quality of the "Chinese schlock" don't buy it. It's rather simple, really. The consumer can decide what quality of goods they want and how much they're willing to spend, which is why I advocate better information on the quality of goods, specifically expensive goods like TVs, cars and the like. If you really don't want to buy a foreign import, don't buy it. But some people do, for whatever reason and it should be their choice.

People who advocate restricting free trade are, in essence, restricting choice. If that's the only way people can think of to get people to buy American, they should take a better look at why people buy foreign imports and try to make the American goods more competitive. They should even look at the areas that free trade has helped increase the exports to other countries.

NAFTA: Good for Farmers, Good for America Prepared by the Office of the United States Trade Representative

U.S. Trade Representative National Foreign Trade Council

Read those sites.

<edited to fix link for the "Good for Farmers" so it points to the right site.

[ August 12, 2002, 08:33 AM: Message edited by: Nash Equilibrium ]

 

You call that "attack mode"? I read your quote in context. It was out of place and, quite frankly, uncalled for. In a debate it's called an "ad hominem." But stubbornkelly's rebuttal to your post there was sufficient (or at least should have been), I imagine.

Why don't I go introduce myself.. because I don't want to. This is the only time I planned on posting here. I really don't want to post in a place where someone might decide I'm a troll and question my Chrisitanity because they disagree or can't rebut what I say. I don't debate that way. I don't even have friendly discussions that way. Just a note: my comment to you about the strange comment for a "Christian" was just a test. I normally don't do those things, but I wanted to see your reaction.

I've all ready stated that I am an American citizen. In fact, I grew up in the US. From 5-15 I lived in New England. Most of my family lives in the US, too, including my older sister and her kids, my grandparents, and all my aunts and uncles. I even worked in the US and I have a retirement account there.

Have a nice life.

 

I have a 2 year old car that already needs an air conditioner compressor. I have a 2 month old DVD-CD player that isnt working right. I paid good money for both. Do you know what an inconvenience it is to return these things to the store to get them fixed. Quality is being sacrificed in order to keep costs down. I'm willing to pay more money so I dont have to get a brand new item fixed!
Cant even find a decent ice cream sandwich anywhere. They are all ice milk.

 

Ps104_33

Two words: Consumer research

I'm not sure if you did or not, but if you don't research the products you are buying, don't complain about the quality. I bought an imported DVD player after researching comsumer reports about it. It might take a bit more time, but it's better in the long run and is especially worth it for high priced items. You can't just go by price, because higher prices don't necessarily mean better quality.

For the ice cream sandwhiches: Nothing's better than home made.

 

SheEagle911

You call that trolling? Giving a couple lessons on the accepted international trade economics, and debating the merits of NAFTA?

One little line saying something's a strange comment for a "Christian" to make makes me a troll, which I admittedly said I did to test you. I thought maybe, just maybe, you might see that some of the things you've said to others is wrong. If I really were trying to troll, I'm sure I could do a better job. I'd have picked a different thread and posted a heck of a lot more often.

I guess what I heard about this board is right. I'll just go away and find a place where people don't shout "TROLL!" or question the other's Christianity when they can't support their claims.

I might even be so lucky as to find a board where the other members can tell when their side of the debate is weaker and don't claim to have refuted the other's arguments when they haven't.

Now that I think about it, my saying that I don't want wander out to various threads might have been a contributing factor in being declared a troll. For that I'll just say I don't want to debate theology.

Since I've just requested to be unregistered, you shouldn't see any more of me.

[ August 12, 2002, 07:06 AM: Message edited by: Nash Equilibrium ]

 

I just wonder *where* these jobs are???? Certainly, not in the cottonfields of Louisiana! Maybe, they're in Washington?! I noticed it doesn't list how many jobs have been lost in America thanks to SHAFTA!

The Bible says in II Thessalonians 3:10, "...that if any would not work, neither should he eat." Some of us still beleive in the Biblical principal of working for our food! Not, waiting in line for a government handout! UGH!

As far as the link you posted on SHAFTA being good for the farmer....I did read it and didn't see the first ounce of proof of it being GOOD FOR ANY HARD WORKING AMERICAN CITIZEN...let alone the farmer. You want to know what SHAFTA has done for the American FARMER? Why not ask an American FARMER?! The proof is in the pudding...not in the 'written recipe'!

"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or your arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen."- Samuel Adams