I sent this letter yesterday to the Washington Times:
To the Editor:
Alluding,
as you correctly report, "to the possibility of economic retaliation by
European states stung by the falling dollar," French president Nicolas
Sarkozy yesterday warned of "economic war" ("China signals dollar
swap," November 8).
Higher tariffs are indeed hateful and
harmful. But do keep in mind an important difference between the more-familiar shoot’-em-up wars and "economic wars": in "economic wars," each
belligerent government aims its weapons only at its own citizens,
demanding that they avoid taking advantage of good economic deals
offered by foreigners. Put differently, in "economic wars," when the
government of A attacks citizens of A, the government of B "retaliates"
by attacking citizens of B. Then to further punish B, the government
of A increases the scale of its attack on citizens of A. And so it
perversely goes.
Sincerely,
Donald J. Boudreaux
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Don,
The standard explanation for protectionist policy, such as tariffs or quotas, is to protect business from foreign competition, which in turn "protects" consumers from lower prices. In response, other nations erect similar protectionist policy, and an "economic war" of tariffs and quotas ensues, ultimately hurting economic prosperity.
My question is: what role to exporters play? If I run a business and make x% of my profits from exports, then I would be opposed to protectionist policy, since an "economic war" with other nations would reduce the profitability of exports. Do businesses that rely on exports for much of their profit, push for fewer tariffs and quotas in their own country?
If this is the case, then it would be interesting to observe the effects of globalisation on protectionism. If business is more often conducted across borders, and particular businesses have offices across the globe, I assume the incentive to push for protectionist policy will be greatly reduced, as it will more often be a double-edged sword.
Regards,
Lee
lee…check out dr. roberts 'the choice', I think it addresses your question.
Man I don't get it. I'm reading the Financial Times, the WSJ ect and all I see is impending disaster and the US of A is becoming a poorer country. Looks like peak oil and a world wide depression are truly possible outcomes. I'm wondering what foreign currency to buy and the professors here are continuing to fiddle a song about how great free trade is. All with so much anti-regulatory fervor and no thought of who's regulating free trade. Oxymoronic form so many directions. I think we're seeing a failed ideology come to fruition…..again.
Poorer?? Yeah we are with out doubt making most of our citizens poorer.
More greatness of free trade…brought to you by Aqua Dots…."Scientists found that the toy's beads contain a chemical that converts into a ''date rape'' drug when ingested. Two children in the United States and three in Australia were hospitalized after swallowing the beads." Any guess's on the country of origin?
Baby Swallows Aqua Dots, Goes Into Coma….but I bet they got them for a good price at least…..JEZ!
I once heard this story told a little differently. Two guys were out fishing in a boat. Mr. A was messing around with his pistol and accidently shot a hole in the bottom of the boat, causing water to start pouring in. Mr. B, upset with his friend's carelessness that put both their lives in danger, retaliated by pulling out his pistol and shooting another hole in the bottom of the boat.
Hey muirgeo… You're a doctor, right? Give us a 1 paragraph primer of GHB. Bonus points if you can note why people used to buy it from GNC for purposes other than date raping.
Also, this toy has been on the market worldwide for more than a year and was toy of the year in Australia. What kind of specific regulation could you imagine that would have prevented recent reactions? Didn't you say you were a pediatrician? I bet you see lots of kids who get little magnets in their ears or swallow them or whatever. Should we eliminate these from all products, regardless of what age group they are intended? Or should we apply cost benefit analyses when considering any potential regulation? Enlighten us please.
". What kind of specific regulation could you imagine that would have prevented recent reactions? "
I don't claim to know the details but it sounds like this toys formulation was changed without oversight.
"Australian officials said instead of using the safe chemical 1,5-pentanediol, the potentially dangerous chemical 1,4-butanediol was introduced in the manufacturing process."
See it's not really free trade when we have a Consumer Products Safety Commission and they don't.
So does the CPSC approve every change in product formulation when the product is produced here? You're the one advocating prior restraint of trade via some nebulous "regulation". Tell us how it works. Explain to us why American food producers occasionally have e coli related recalls if regulation actually solves all problems.
I know, I know! Because Big Business Bad. Big Business Vewy Vewy Bad.
Did I get it right murigeo?
Have you opined on the inclusion of certain working and environmental conditions in trade pacts?
If so, please direct.
Regards.
"Two children in the United States and three in Australia were hospitalized after swallowing the beads."
"Posted by: muirgeo | Nov 9, 2007 11:32:36 AM"
Only two in the USA, and three in Australia?
That's pretty darn good, considering my experience with toxicity as related below!
Was the "mystery reader" at the grandchilds 1st grade Friday reading session. So, I printed off one of muirducks long diatribes against capitalism, free markets, and how screwed up Don and Russ are; then read that to the kids.
The entire class grew quickly sick to their stomachs and dizzy in their heads. All 25 had to throw up and half had to be hospitalized. I wasn't even able to finish the post I had printed off.
Moral of the story: Swallow any suspicious bead but don't listen to muirduck, you'll have much better odds at staying healthy…..but then you guys had that one figured out anyway, didn't you?
Better yet, muirduck, dear child, is what the hell did your input have to do with Don's topic? In no way shape or form did you address anything remotely connected to his comments to begin this thread.
Your input is not interesting in any way other than to allow intelligent people to marvel at the vacuity of your ideas and your expression of them.
It is just one repitious socialist scripture after another. Discredited by history and nature, ignored by the ambitious, and reviled by the productive.
Steal.
Steal more.
Steal it all.
And, for Go……State's sake allow no one to shoulder any responsibility.
As Russ said to Ed on another blog, intelligent people have better things to do with their time and intellects than to suffer through copious posts from people who don;t just "not get it", but actively oppose anything and everything on the blog.
In case you haven't realized it yet, muirduck, the attention you draw is much like the….no exactly like the attention the monkey with the tin cup draws when he pulls his antics to the music of the organ grinder.
You are on a socialist chain and dancing to the tune of your statist priest, banging your little tin cup on anything that will make noise for you.
In the end there isn't amusement, there is pity for you because you are so simply locked down between the ears.
Bill,
You may have heard the rowboat story from Walter Williams:
"Imagine that you and I are in a rowboat. I commit the stupid act of shooting a hole in my end of the boat. Would it be intelligent for you to respond by shooting a hole in your end of the boat?"
http://www.jewishworldreview.com/cols/williams043003.asp
Bill,
You may have heard the rowboat story from Walter Williams:
"Imagine that you and I are in a rowboat. I commit the stupid act of shooting a hole in my end of the boat. Would it be intelligent for you to respond by shooting a hole in your end of the boat?"
http://www.jewishworldreview.com/cols/williams043003.asp
Tariffs "work" if you can dump the bad effects off on someone else. Lincoln imposed an extraordinarily high tarrif, that greatly encouraged manufacturing in the North, while giving the economic screw to the South. It eventually resulting in our bloodiest war.
I live in Silicon Valley. Imagine if there were a 50% tariff on chips, and steep monetary penalties for outsourcing software development. It would be boom times in Silicon Valley again! But the rest of the nation would be poorer, as electronics, software and IT would be more expensive.
Most succinctly put by (who else) Milton Friedman in the terms that; "just because these people are saddists there is no reason for us to be masochists".
I think it was someone on this blog who compared protectionism at home in response to protectionism abroad to dumping rocks in your own harbour because some idiot half way around the world did it. I've used that one a few times
I don't know how to register to make commentary.
GregW,
Thanks for the Walter Williams reference. I don't recall where I first encountered this little tale – it very well could have been in Walter's writings. I used it routinely in economics classes when commenting on the notion of "leveling the playing field."
*quack quack quack quack*
Brad,
You made the mistake of asking Muirgeo a question. Muirgeo does not answer questions, as you have recently discovered.
You asked,"What kind of specific regulation could you imagine that would have prevented recent reactions?" and also "So does the CPSC approve every change in product formulation when the product is produced here?…" The answer from Muirgeo was, "quack, quack, quack". As usual.
The question I ask, as I've asked elsewhere, is will this induce China to "unPeg" their currency? Given stable prices and a stable money supply, isn't this devaluation a good tool? It is true that you may spend less on foreign goods, but isn't this currency devaluation a better tool than tariffs?
OregonGuy,
Yes. There are three ways I can think of to make China unpeg the dollar:
1) Nuke them until they do
2) Devalue the dollar, probably below it's market rate for a period
3) Go into recession
Number two appears to be by far the best option.