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Bonus Quotation of the Day…

… is from page 14 of “12 Myths of International Trade,” a June 2000 Staff Report of the Joint Economic Committee (which, I think, was written either by, or under the guidance of, the great Jim Gwartney):

As Adam Smith noted more than two centuries ago, a nation can gain from trade whenever a good can be acquired from foreigners more cheaply than it can be produced domestically. When foreign governments subsidize their exports to us, they are subsidizing American consumers. Of course, the subsidies are costly to the taxpayers funding them. With time, they are likely to tire from the burden and bring the subsidies to a halt. If foreigners are subsidizing their producers, some argue we should do the same. This makes no sense. Merely because foreigners are wasting their resources propping up inefficient suppliers is no reason for us to engage in the same folly. As with other trade restrictions, export subsidies will channel more of our resources toward production of things we do poorly and away from things we do well. A smaller output and lower level of income will result. Put simply, neither individuals nor nations can expect to get ahead by spending more time producing things they do poorly.

DBx: Pictured above is retaliatory protectionism.


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