{"id":5993,"date":"2016-03-08T22:08:27","date_gmt":"2016-03-08T22:08:27","guid":{"rendered":"http:\/\/www.rationalargumentator.com\/index\/?p=5993"},"modified":"2016-03-08T22:10:19","modified_gmt":"2016-03-08T22:10:19","slug":"anti-foreign-crankery","status":"publish","type":"post","link":"https:\/\/www.rationalargumentator.com\/index\/blog\/2016\/03\/anti-foreign-crankery\/","title":{"rendered":"Bernie Sanders’ Anti-Foreign Crankery – Article by Daniel Bier"},"content":{"rendered":"
\n
\"The<\/a>Daniel Bier<\/span>
\n<\/big><\/big><\/strong><\/div>\n<\/div>\n
******************************<\/div>\n
<\/div>\n
\n
\n

A Vesuvius of Tribalism and Economic Illiteracy<\/em><\/strong><\/p>\n

At\u00a0Sunday’s Democratic presidential debate, Bernie Sanders attacked American trade<\/a> with Mexicans, Chinese, Vietnamese, and presumably all other foreigners who might try to steal our jobs. Sanders harangued Hillary Clinton,<\/p>\n

NAFTA, supported by the Secretary,\u00a0cost us 800,000 jobs nationwide, tens of thousands of jobs in the Midwest. Permanent normal trade relations with China cost us millions of jobs.<\/p>\n

Look, I was on a picket line in early 1990\u2019s against NAFTA because you didn\u2019t need a PhD in economics to understand that American workers should not be forced to compete against people in Mexico making 25 cents an hour.<\/strong><\/p>\n

…\u00a0And the reason that I was one of the first, not one of the last to be in opposition to the TPP is that American workers … should not be forced to compete against people in Vietnam today making a minimum wage of $0.65 an hour.<\/p>\n

Look, what we have got to do is tell corporate America that they cannot continue to shut down. We\u2019ve lost 60,000 factories since 2001. They\u2019re going to start having to, if I\u2019m president, invest in this country \u2014 not in China, not in Mexico.<\/p><\/blockquote>\n

First, let’s note his\u00a0dodgy job\u00a0numbers. As Dan Griswold\u00a0noted in 2011<\/a>, in response to a similar claim about jobs “lost” from the “trade deficit” with Mexico,<\/p>\n

In the first five years after NAFTA\u2019s passage, 1994-98, when we could have expected it to have the most impact, the U.S. economy ADDED a net 15 million new jobs, including 700,000 manufacturing jobs.<\/p><\/blockquote>\n

Behold, the horror unleashed on US manufacturing jobs\u00a0by trade with Mexico:\"nafta-manufacturing\"<\/a><\/p>\n

In fact, since NAFTA\u00a0went into effect in 1994, total US employment has increased by 28 million jobs. Even if we buy the dubious claim that NAFTA “cost us 800,000 jobs” over the last 22 years, this amounts just 36,000 jobs a year.<\/p>\n

As Griswold noted, even in\u00a0good times, 300,000 Americans\u00a0file for unemployment each week.<\/em> The US economy creates and destroys more than 15 million jobs every year<\/em>. This alleged displacement amounts to less than one day’s worth of job losses.<\/p>\n

It’s true that, in the long-run,\u00a0manufacturing jobs<\/em> have\u00a0been in decline in\u00a0the United States. But this is not because\u00a0manufacturing<\/em> is in decline. The myth (promoted by the other nationalist blowhard<\/a> in the race) that United States “doesn’t make stuff anymore” is not just wrong\u00a0\u2014 it couldn’t be further from the truth.<\/p>\n

Real US manufacturing output is the highest it has ever<\/em> been. Simply put, the US makes more stuff than ever.<\/p>\n

\"manufacturing-index\"<\/a>How can this be? Because manufacturing\u00a0productivity<\/em> \u2014 the amount of value added\u00a0per hour worked \u2014 has gone up dramatically in recent decades. Manufacturing employment is declining because of automation<\/em>; a\u00a0US factory worker\u00a0today can\u00a0add a lot more value per hour than one\u00a0in 1970.<\/p>\n

\"manufacturing-employees-output-per-hour\"<\/a><\/p>\n

It’s simply not true that\u00a0trade\u00a0devastated the US economy\u00a0and wiped out millions of jobs. Employment has shifted<\/em>\u00a0within\u00a0the US economy, out of industry\u00a0into service jobs, and manufacturing has shifted<\/em> around the globe, aligning production with the comparative advantages of each country’s labor and capital markets.<\/p>\n

The resentment stoked by nationalists\u00a0like Trump and Sanders is\u00a0based on a nonsensical proposition, a mirage of high-paying blue collar jobs stolen by conniving foreigners, which\u00a0we could reclaim if only we had the will to wage a trade war<\/a>.<\/p>\n

But the\u00a0machines and global production chains are here to stay, and the jobs being done in Vietnam and China\u00a0for fifty cents an hour are on the extreme low end of the value-added chain\u00a0\u2014\u00a0which should be obvious, when you think about it, since they pay so little. (On the back of every\u00a0iPhone is a short economics lesson on this point: “Designed by Apple in California. Assembled in China.”)<\/p>\n

Do we\u00a0really want to “bring those jobs back”? Do we\u00a0envision a future where the American middle class is\u00a0sewing textiles in sweatshops for a dollar an hour? Of course not.\u00a0Americans today likely wouldn’t do those jobs at any wage, but especially\u00a0not\u00a0at the wages\u00a0paid to low-skilled workers in developing Asian and Latin American countries.\u00a0Those jobs only exist<\/em> at those wages; at higher wages, they are\u00a0scarcer, higher-skilled, and more capital intensive.<\/p>\n

True, we could<\/em> make t-shirts and Happy Meal toys in the United States, but we’d be doing it with far, far fewer workers and a lot more capital. Instead of 30\u00a0workers at\u00a0fifty cents an hour, it’d be one person with\u00a0a machine for\u00a0$20\u00a0an hour.<\/p>\n

The real difference would be that everyone would be poorer as a result: consumers paying higher prices, foreigners working in worse conditions and for less money, and American resources being diverted away from where they are most productive.<\/p>\n

This is where economic ignorance stops being morally neutral and becomes a real threat to the life and well-being of the poor, especially in the developing world.<\/p>\n

Not content\u00a0to merely<\/em> keep Mexicans from working in the United States<\/a>\u00a0(where, thanks to US capital and infrastructure, they could earn three or four times<\/a>\u00a0more than they make in Mexico),\u00a0Bernie Sanders now objects to the right of Mexicans to work in Mexico<\/em>, if they dare to sell\u00a0goods and\u00a0services to\u00a0Americans \u2014 or, God forbid, try to compete<\/em> with American firms.<\/p>\n

For a champion of the poor like Sanders, there’s a double irony here, in that poor Americans are already much wealthier than poor Mexicans, and that tariffs also make goods more expensive for native consumers, disproportionately hurting the poorest Americans. Not only are poor Mexicans made worse off, by losing access to the US market and thus losing jobs, but poor Americans are also made worse off by having less disposable income, which is thus not spent elsewhere in the economy to\u00a0sustain other American jobs.<\/p>\n

And this is\u00a0just the first order<\/em> effects of closing\u00a0off trade with Mexico. When the Mexican government\u00a0inevitably retaliates, US exports to Mexico (which totaled $236 billion in 2015) will also be devastated and more jobs will be lost. And of course, simply multiply this orders of magnitude for China, Vietnam, and every other country on the nationalistic hit list.<\/p>\n

Who gains from this? In the long run, nobody, which is\u00a0why (after decades of gradual reform) we finally got relatively free trade with our closest neighbors,\u00a0signed into law\u00a0by a liberal Democrat.\u00a0But in the short run, a few US corporations and labor unions would benefit from trade tariffs \u2014 at the expense of both poor foreigners\u00a0and poor Americans as a whole.<\/p>\n

(For those keeping score, this\u00a0makes it an ironic hat trick for Sanders, whose\u00a0tirades against\u00a0free trade and open borders\u00a0are laced with fear-mongering about “corporations.”)<\/p>\n

Finally, let us ponder Sanders’ Alice-in-Wonderland\u00a0solution to the imagined ills of free trade:<\/p>\n

Look, what we have got to do is tell\u00a0corporate America that they cannot continue to shut down. We\u2019ve lost 60,000 factories since 2001. They\u2019re going to start having to, if I\u2019m president, invest in this country \u2014 not in China, not in Mexico.<\/p><\/blockquote>\n

Did I say Alice in Wonderland<\/em>? I meant Atlas Shrugged<\/em>. Ayn Rand was\u00a0justly\u00a0accused of having unbelievable, one-dimensional stereotypes, but sadly, American politics seems to have\u00a0the same problem.<\/p>\n

It’s anyone’s\u00a0guess\u00a0how Sanders imagines he\u00a0could force factories not to close and order\u00a0companies to stay\u00a0in the United States, but the “you can’t\u00a0shut down” solution is\u00a0almost directly lifted\u00a0from “Directive 10-289,” the order that Rand’s antagonists\u00a0use to try to “stabilize” the economy:<\/p>\n

All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment… All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation…<\/p><\/blockquote>\n

Faced with economic decline, the government\u00a0believed that the only option was\u00a0to stop<\/em> the decline, rather allowing people to go where they choose, buy what they choose, and make what they choose.\u00a0“What it comes down to is that we can manage to exist as and where we are, but we can’t afford to move!” archvillain Wesley Mouch exclaims.\u00a0“So we’ve got to stand still… We’ve got to make those bastards stand still!”<\/p>\n

When Rand first\u00a0published\u00a0this\u00a0in 1957, this\u00a0was hyperbole about the fear of change, the\u00a0reductio ad absurdum<\/em>\u00a0of\u00a0the argument for keeping\u00a0things as they are. Now, it’s an applause line for mainstream presidential candidates.<\/p>\n

Daniel Bier is the site editor of FEE.org He writes on issues relating to science, civil liberties, and economic freedom.<\/strong><\/p>\n

This article was published by The Foundation for Economic Education<\/a> and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License<\/a>, which requires that credit be given to the author.<\/strong><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Daniel Bier ****************************** A Vesuvius of Tribalism and Economic Illiteracy At\u00a0Sunday’s Democratic presidential debate, Bernie Sanders attacked American trade with Mexicans, Chinese, Vietnamese, and presumably all other foreigners who might try to steal our jobs. Sanders harangued Hillary Clinton, NAFTA, supported by the Secretary,\u00a0cost us 800,000 jobs nationwide, tens of thousands of jobs in the Midwest. Permanent normal trade relations with China cost us millions of jobs. Look, I was on a picket line in early 1990\u2019s against NAFTA because…<\/p>\n

Read More Read More<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,5],"tags":[4598,4228,4503,20,815,2664,2665,1200,876,1616,1143,1188,1408,3172],"class_list":["post-5993","post","type-post","status-publish","format-standard","hentry","category-economics","category-politics","tag-2016-presidential-election","tag-bernie-sanders","tag-daniel-bier","tag-economics-2","tag-employment","tag-fee","tag-foundation-for-economic-education","tag-free-trade","tag-immigration","tag-labor-unions","tag-mexico","tag-protectionism","tag-tariffs","tag-tribalism"],"_links":{"self":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/5993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/comments?post=5993"}],"version-history":[{"count":3,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/5993\/revisions"}],"predecessor-version":[{"id":6000,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/5993\/revisions\/6000"}],"wp:attachment":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/media?parent=5993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/categories?post=5993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/tags?post=5993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}