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Thread: Joblessness

  1. #61
    Cost advantage is part of comparative advantage. And when the cost advantage is due to unfair differences in regulation then the comparative advantage is unfair. Now if you believe I am not understanding comparative advantage then maybe you'd be kind enough to enlighten me.
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  2. #62
    In a normal world, that is a wake up call to change how you regulate and tax things. Hint hint, US Govt.

    But more broadly, it's simply silly to argue that all things should/will cost the same in all countries. Things don't even cost the same in different parts of the US. EG housing. Should landlords in Philadelphia be sued because they are offering comparable products at prices that are higher than Topeka, Kansas?

  3. #63
    Quote Originally Posted by Dreadnaught View Post
    In a normal world, that is a wake up call to change how you regulate and tax things. Hint hint, US Govt.

    But more broadly, it's simply silly to argue that all things should/will cost the same in all countries. Things don't even cost the same in different parts of the US. EG housing. Should landlords in Philadelphia be sued because they are offering comparable products at prices that are higher than Topeka, Kansas?
    I agree, that would be silly to expect things to cost the same. Fair Trade is not about making things cost the same. Fair Trade is about taking the externalities imbalance into account when calculating the cost advantage. Direct labor cost would have no effect on this but indirect labor costs (externalities) would.
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  4. #64
    A PETITION From the Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.

    To the Honourable Members of the Chamber of Deputies.

    Gentlemen:

    You are on the right track. You reject abstract theories and little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry. We come to offer you a wonderful opportunity for your -- what shall we call it? Your theory? No, nothing is more deceptive than theory. Your doctrine? Your system? Your principle? But you dislike doctrines, you have a horror of systems, as for principles, you deny that there are any in political economy; therefore we shall call it your practice -- your practice without theory and without principle.

    We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us [1].

    We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull's-eyes, deadlights, and blinds -- in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.

    Be good enough, honourable deputies, to take our request seriously, and do not reject it without at least hearing the reasons that we have to advance in its support.

    First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged?

    If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.

    If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.
    Our moors will be covered with resinous trees. Numerous swarms of bees will gather from our mountains the perfumed treasures that today waste their fragrance, like the flowers from which they emanate. Thus, there is not one branch of agriculture that would not undergo a great expansion.

    The same holds true of shipping. Thousands of vessels will engage in whaling, and in a short time we shall have a fleet capable of upholding the honour of France and of gratifying the patriotic aspirations of the undersigned petitioners, chandlers, etc.

    But what shall we say of the specialities of Parisian manufacture? Henceforth you will behold gilding, bronze, and crystal in candlesticks, in lamps, in chandeliers, in candelabra sparkling in spacious emporia compared with which those of today are but stalls.

    There is no needy resin-collector on the heights of his sand dunes, no poor miner in the depths of his black pit, who will not receive higher wages and enjoy increased prosperity.

    It needs but a little reflection, gentlemen, to be convinced that there is perhaps not one Frenchman, from the wealthy stockholder of the Anzin Company to the humblest vendor of matches, whose condition would not be improved by the success of our petition.

    We anticipate your objections, gentlemen; but there is not a single one of them that you have not picked up from the musty old books of the advocates of free trade. We defy you to utter a word against us that will not instantly rebound against yourselves and the principle behind all your policy.
    Will you tell us that, though we may gain by this protection, France will not gain at all, because the consumer will bear the expense?

    We have our answer ready:

    You no longer have the right to invoke the interests of the consumer. You have sacrificed him whenever you have found his interests opposed to those of the producer. You have done so in order to encourage industry and to increase employment. For the same reason you ought to do so this time too.

    Indeed, you yourselves have anticipated this objection. When told that the consumer has a stake in the free entry of iron, coal, sesame, wheat, and textiles, ``Yes,'' you reply, ``but the producer has a stake in their exclusion.'' Very well, surely if consumers have a stake in the admission of natural light, producers have a stake in its interdiction.

    ``But,'' you may still say, ``the producer and the consumer are one and the same person. If the manufacturer profits by protection, he will make the farmer prosperous. Contrariwise, if agriculture is prosperous, it will open markets for manufactured goods.'' Very well, If you grant us a monopoly over the production of lighting during the day, first of all we shall buy large amounts of tallow, charcoal, oil, resin, wax, alcohol, silver, iron, bronze, and crystal, to supply our industry; and, moreover, we and our numerous suppliers, having become rich, will consume a great deal and spread prosperity into all areas of domestic industry.

    Will you say that the light of the sun is a gratuitous gift of Nature, and that to reject such gifts would be to reject wealth itself under the pretext of encouraging the means of acquiring it?

    But if you take this position, you strike a mortal blow at your own policy; remember that up to now you have always excluded foreign goods because and in proportion as they approximate gratuitous gifts. You have only half as good a reason for complying with the demands of other monopolists as you have for granting our petition, which is in complete accord with your established policy; and to reject our demands precisely because they are better founded than anyone else's would be tantamount to accepting the equation: + x + = -; in other words, it would be to heap absurdity upon absurdity.

    Labour and Nature collaborate in varying proportions, depending upon the country and the climate, in the production of a commodity. The part that Nature contributes is always free of charge; it is the part contributed by human labour that constitutes value and is paid for.

    If an orange from Lisbon sells for half the price of an orange from Paris, it is because the natural heat of the sun, which is, of course, free of charge, does for the former what the latter owes to artificial heating, which necessarily has to be paid for in the market.

    Thus, when an orange reaches us from Portugal, one can say that it is given to us half free of charge, or, in other words, at half price as compared with those from Paris.

    Now, it is precisely on the basis of its being semigratuitous (pardon the word) that you maintain it should be barred. You ask: ``How can French labour withstand the competition of foreign labour when the former has to do all the work, whereas the latter has to do only half, the sun taking care of the rest?'' But if the fact that a product is half free of charge leads you to exclude it from competition, how can its being totally free of charge induce you to admit it into competition? Either you are not consistent, or you should, after excluding what is half free of charge as harmful to our domestic industry, exclude what is totally gratuitous with all the more reason and with twice the zeal.

    To take another example: When a product -- coal, iron, wheat, or textiles -- comes to us from abroad, and when we can acquire it for less labour than if we produced it ourselves, the difference is a gratuitous gift that is conferred up on us. The size of this gift is proportionate to the extent of this difference. It is a quarter, a half, or three-quarters of the value of the product if the foreigner asks of us only three-quarters, one-half, or one-quarter as high a price. It is as complete as it can be when the donor, like the sun in providing us with light, asks nothing from us. The question, and we pose it formally, is whether what you desire for France is the benefit of consumption free of charge or the alleged advantages of onerous production. Make your choice, but be logical; for as long as you ban, as you do, foreign coal, iron, wheat, and textiles, in proportion as their price approaches zero, how inconsistent it would be to admit the light of the sun, whose price is zero all day long!
    http://bastiat.org/en/petition.html
    Hope is the denial of reality

  5. #65
    Fair Trade is not protectionism. That's an extremist argument. The argument from the other extreme is let's just get rid of all the regulations that act against our advantage; let's get rid of the Superfund.
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  6. #66
    Yes, but you're mainly harping on cost. You think that it's cheaper to produce things in Asia primarily because they often disregard the environment. Yet you ignore the very natural and obvious issue of price disparities in different countries.

  7. #67
    Quote Originally Posted by Dreadnaught View Post
    Yes, but you're mainly harping on cost. You think that it's cheaper to produce things in Asia primarily because they often disregard the environment. Yet you ignore the very natural and obvious issue of price disparities in different countries.
    I know that things are cheaper to produce in countries that disregard the environment. But there are other disregards that also affect the advantage. Are you okay with letting American workers, and their family, become begars because they lost their hand in a particle board press. I'm guessing no. So why is it acceptable for that to happen in another country for the sake of comparative advantage?
    .

  8. #68
    Become beggars? No, that's not ideal. But institute a socialist government so that no one can ever be down on their luck (which is what you're heading towards)? Also no.

  9. #69
    Quote Originally Posted by Dreadnaught View Post
    Become beggars? No, that's not ideal. But institute a socialist government so that no one can ever be down on their luck (which is what you're heading towards)? Also no.
    We already have workmen's comp, disability, and unemployment benefits. Does that make the US SSSocialist?

  10. #70
    Quote Originally Posted by GGT View Post
    We already have workmen's comp, disability, and unemployment benefits. Does that make the US SSSocialist?
    Socialism is producing equal results. The point of those benefits is to provide an equal opportunity. Reform liberalism != democratic socialism.
    Hope is the denial of reality

  11. #71
    Mine was a comment to Dread, as he suggested we're going down the road of a SSSocialist government where no one can ever be down on their luck.

  12. #72
    re: joblessness and the great recession. To date most of the lay-offs and down-sizing has been in the private sector. But now the second wave is starting to hit the public sector. Since less tax revenue is coming to municipal and state operations, we're seeing cuts in police, fire fighters, teachers, public health workers, DoT workers.....even state university budgets are being slashed, student aid is being cut.....

    Using jobless rate, unemployment surveys, labor index, inventory or production rates, or GDP only goes so far to paint the picture of economic "health". What about the number of people who are delaying retirement, the underemployed, consumer confidence, PPI, personal debt to income ratios?

    Why isn't there some super-stat that takes all these things into consideration? If there is, what is it called and how is it calculated?

  13. #73
    Quote Originally Posted by Dreadnaught View Post
    Become beggars? No, that's not ideal. But institute a socialist government so that no one can ever be down on their luck (which is what you're heading towards)? Also no.
    Not ideal but acceptable as long as the cost advantage is significant enough?
    .

  14. #74
    I'll echo what Loki is saying here. The safety net is meant to help people not totally fall off the wagon and ensure they have the opportunity to be employed again.

    It really has little to do with imposing tariffs and dismantling trade links just because you don't like that the Chinese can make quality tires more cheaply than a dude in Detroit with a lopsided pension obligation.

  15. #75
    Quote Originally Posted by Dreadnaught View Post
    I'll echo what Loki is saying here. The safety net is meant to help people not totally fall off the wagon and ensure they have the opportunity to be employed again.

    It really has little to do with imposing tariffs and dismantling trade links just because you don't like that the Chinese can make quality tires more cheaply than a dude in Detroit with a lopsided pension obligation.
    Should the reasons that chinese can make tires cheaper ever be a consideration? Or do we just accept the fact they can?
    .

  16. #76
    Beyond the numbers and official stats, real or not, people in US are suffering hunger, something that would have been unthinkable in the past.
    All the obstacles to reforms of any kind in US are based on the assumption that the system works fairly. U.S. Department of Agriculture (USDA) hates to use words like “hunger” and “malnutrition” in the same sentence as the “United States.”

    A paradox of plenty – hunger in America

    After all, a bedrock belief in America held that this is the land of unlimited opportunities where every citizen has an equal chance to succeed and become rich. That requires an assumption that the system is fair. How many Americans still believe that?
    In this era of bank subsidies and bonuses, almost 50 million in US are chronically lacking adequate food, according to the government. 1 in 8 Americans is now on food stamps. 1 in 6 Americans sometimes goes hungry for lack of money. And it’s getting worse.
    Freedom - When people learn to embrace criticism about politicians, since politicians are just employees like you and me.

  17. #77
    Perhaps what we really need here is a thread titled, "How Many Ways Does the US Suck? Let Us Count The Ways...."

  18. #78
    Well, this is a plus but it's no where near enough. Where is all the ideas on how to actually solve the jobs crisis?

    Jobs Bill Passes in Senate With 11 Votes From Republicans
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  19. #79
    Quote Originally Posted by GGT View Post
    Perhaps what we really need here is a thread titled, "How Many Ways Does the US Suck? Let Us Count The Ways...."
    I would say: "How many myths around the US system".
    Except for US marketing that made the world to believe in myths, the system was plagued with failures.

    For example:


    Seeing the current status of US reminds me Mexico 25 years ago. At the time Mexico still was a great nation with outstanding talents and a more civilized lifestyle during the first half of 20th century. But it started to go down because of politicians, until it reached current situation.
    In the beginning of 20th century Argentina was seen as the south american version of USA.
    Both nations are reminders that no matter how developed a nation is, it may fall anytime.
    Last edited by ar81; 03-17-2010 at 09:02 PM.
    Freedom - When people learn to embrace criticism about politicians, since politicians are just employees like you and me.

  20. #80
    Now it looks like the government is going to start making partial mortgage payments for the unemployed. Seems like a waste of money if there aren't jobs created between now and the time the money runs out.

    Obama to push mortgage help for unemployed
    .

  21. #81
    Quote Originally Posted by ar81 View Post
    In the beginning of 20th century Argentina was seen as the south american version of USA.
    Both nations are reminders that no matter how developed a nation is, it may fall anytime.
    Reminds me of something I read in a very interesting book-- you (and maybe others) really should read False Economy. You'll be full of little facts to throw upon people then! (srsly)

  22. #82

    Now it looks like the government is going to start making partial mortgage payments for the unemployed. Seems like a waste of money if there aren't jobs created between now and the time the money runs out.
    I can just imagine the poor folk who rent and are wondering when they get their goodies...

  23. #83
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    Quote Originally Posted by Lewkowski View Post
    I can just imagine the poor folk who rent and are wondering when they get their goodies...
    The article isn't really saying they won't have to pay, it just says they can defer the payments. For how long isn't clear. The writing down of loans is a different matter, which will cost a lot of money and you really have to wonder if that is right. I would like to know who gets the gains if the prices of those houses go up again in the end.
    Greece shows us that there is a kind of politician worse than the ones that break their election promises; the ones that keep their election promises.

  24. #84
    The administration's newest push also seeks to more aggressively help borrowers who owe more on their mortgages than their properties are worth, by encouraging lenders to cut the loan balances of millions of these distressed homeowners and possibly refinance into loans backed by the Federal Housing Administration. The problem of so-called "underwater" borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged.

    Second, government will double the amount it pays to lenders that help modify second mortgages, such as piggyback mortgages, which enabled home buyers to put little or no money down, home equity lines of credits. These second mortgages are an added burden on struggling homeowners, especially when their total debt, as a result, is greater than their home value.

    This sounds like a mess. Didn't Citi and BoA already agree to cut deals with some homeowners, without being paid with our tax dollars as incentive?

    Still makes no sense to focus on "underwater" homes, unless they were already planning to sell but won't sell short and instead walk away. Just because homes have lost on appraised value doesn't mean everyone should sell and move.

    These walkaway jingle-key people need to know they'll have to pay taxes on their mortgage amount as income, even if they give the house back to the bank. I think the same applies to reduced principle loans--they'll have to pay a capital gains tax on the difference, won't they? And all of this will hit their credit scores in a big way.

  25. #85
    Doubt they will have to pay a capital gains tax, GGT...

  26. #86
    Why not? If they had a home equity loan, and bought something with it, they either have to pay the money back (with interest) or declare it as income. Just because the principle is reduced doesn't mean they didn't get a check, cash it, and spend it.

  27. #87
    Ok, fine. But no one can be forced to pay a capital GAINS tax unless they sell the house at a price higher than they bought it for. I'm pretty sure of that..

  28. #88
    Cash money from a home equity loan is income unless or until the loan is paid off, whatever its tax category. If they walk away from the house, the first lien holder gets the property. But what about the 2nd lien holder, who coughed up the cash?

    The walkaways might also be liable for property taxes in arears, unless the bank started to pay them as the title holder, but that's kind of unlikely. Title and deed transfers have to go thru the court system and be legally recorded, even a Deed in Lieu transfer....

    Unless they filed for bankruptcy, I think walkaways will be surprised by taxes they'll owe, or fines at least.

  29. #89
    The IRS counts forgiven debt as income. I believe though that was temporarily done away with as part of the stimulus garbage. Could be wrong I didn't pat attention to every detail of that monster.

  30. #90
    I meant for those who actually kept their homes... for walkaways, that is a very cloudy thing.

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