Not surprisingly, bailouts beget more bailouts. My colleagues at the Mercatus Center, Matthew Mitchell and Tad DeHaven, write, “We know from the history of bailouts that the true cost of a bailout is not the taxpayer expense (which is often recouped) but the expectation it sets for future bailouts, an expectation that invites future disaster.”
Peter Lyons claimed the purpose of trade barriers in the US is to encourage investment in businesses that provide a decent return on capital – unlike agriculture, according to Lyons. That is implausible. Since when did capitalists need governmental coercion to invest in high-return businesses? The real purpose of trade barriers is to do favours for politically influential domestic businesses.
Here’s the first of four in a series of essays on international trade by my Mercatus Center colleague Dan Griswold. In this series Dan “will examine the most common arguments against free trade.” A slice:
Unfortunately, the leaders of both major parties fail to understand the basic fact that trade is not about more jobs or fewer jobs but about better jobs, whether in manufacturing or the service sector. Like technology, trade allows the US economy to shift workers and investment to sectors where we are relatively more productive. That generally means producing goods and services that play to our strengths as an advanced economy, such as airliners, semiconductors, and financial services, and making fewer goods and services that workers in other nations can produce more competitively.