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Trade Adjustment Assistance?

Posted By Don Boudreaux On May 17, 2011 @ 1:32 pm In Other People's Money,Seen and Unseen,Trade | Comments Disabled

The Washington Post today reports [1] that

The White House is threatening to hold up final passage of three coveted free trade agreements unless lawmakers agree to expand retraining assistance for American workers who lose their jobs because of foreign competition.

Pres. Obama here seeks to subsidize certain workers against the downside of being part of an open, competitive, and dynamic market economy.  Preventing consumers from dealing more freely with foreigners until and unless Congress authorizes such subsidies, however, is economically unjustified because there’s nothing unique about international trade in ‘destroying’ jobs.  Market activity of all sorts destroys some jobs and replaces them with other, usually better jobs.  More generally, any time consumers change their spending patterns, some jobs are ‘destroyed’ while other jobs – often far more difficult to identify than are the jobs that are destroyed – are created.

Would it have been appropriate, for example, for the White House to prevent Americans from buying iPods and Kindles until and unless Congress funded the retraining of workers who lost their jobs at Tower Records and Border’s?  Should government have stopped automakers from improving the quality of their vehicles until and unless the public fisc was tapped for funds to retrain auto mechanics and tow-truck drivers?  Ought government restrict consumers’ access to Lasik surgery until and unless taxpayers pay to retrain workers who make eyeglasses, contact lenses, and saline solution?

Or maybe Uncle Sam should have kept the Beatles and their recordings out of America [2] until and unless Congress obliged American taxpayers to pay to retrain second-rate rockers from places such as Tennessee, Texas, and Illinois (not to mention the many poor barbers who lost their jobs!).

Fact is, the only thing unique about international trade is its ability to be demagogued by politicians seeking votes from the economically uninformed.

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[1] The Washington Post today reports: http://www.washingtonpost.com/business/white-house-threatens-to-hold-up-trade-deals-unless-congress-expands-aid-for-us-workers/2011/05/16/AFJKWq4G_story.html

[2] maybe Uncle Sam should have kept the Beatles and their recordings out of America: http://www.cambridge.org/press/article.asp?artid=154901

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