Obama's apparent pick to be the next U.S. trade representative is Rep. Xavier Becerra, a Los Angeles Democrat. With the exception of attorney general, I haven't had big problems with any of Obama's picks thus far, but this one looks to be a doozy. His hometown newspaper calls Becerra a "terrible choice" with a "history of unsavory behavior" while another West Coast publication describes the selection as "disheartening."
If this goes through it would seem to be a sign that any movement on trade liberalization would be dead in the water for the next few years. That's too bad.
Let me attempt to illustrate the importance of free trade with a butchered synopsis of a parable that I read a few years back. The title of this story was something like "The Car Fields of Iowa" and points out to the reader that cars can be grown in Iowa. First you plant corn seeds, water and fertilize them and harvest the resulting crop. Then you ship it off to a mysterious place called Japan where the corn is processed and returned to Iowa in the form of shiny new automobiles.
This illustrates a few points. The first is that without trade we'd all be stuck with whatever we could produce from the raw materials in our immediate surroundings. That's a particularly relevant point if you live in say, Iceland or Saudi Arabia. Trade introduces variety into our lives, and the more people we can trade with the better.
Another point is that it shouldn't matter where the places are that I seek to trade with. Why should it be regarded as better for the Iowa farmer to send his corn to Detroit (or, more realistically these days, South Carolina) in exchange for cars than Japan? Ultimately it is a transaction between me and that other person whose citizenship or location should be of no relevance. Democrats, who tend to be self-styled citizens of the world, should think long and hard about this.
Lastly, it can be helpful to think of free trade as simply a machine or mechanism. If I were to replace two workers with a machine I suspect that most people wouldn't bat an eyelid. This is rather commonplace and has been occurring for quite some time, yet it hasn't pushed up unemployment and made us all penniless. Indeed, if you look at unemployment rates over the past 50+ years you generally see rates fluctuate from 3-10% -- it hasn't gotten worse as our economy has become more mechanized and computerized. In fact, it has made us richer, enabling us to do more with less -- which is the whole secret to prosperity in the first place.
Now, if instead of replacing two workers with a machine imagine that a business owner simply decided to have the jobs performed in Mexico. Really it's the same principle, just instead imagine that the machine was labeled "Mexico." In our story the farmer uses a machine called "Japan."
This story may seem like a childish way of addressing a serious topic, but I think that it holds some lessons the Obama Administration's would do well to heed.
If this goes through it would seem to be a sign that any movement on trade liberalization would be dead in the water for the next few years. That's too bad.
Let me attempt to illustrate the importance of free trade with a butchered synopsis of a parable that I read a few years back. The title of this story was something like "The Car Fields of Iowa" and points out to the reader that cars can be grown in Iowa. First you plant corn seeds, water and fertilize them and harvest the resulting crop. Then you ship it off to a mysterious place called Japan where the corn is processed and returned to Iowa in the form of shiny new automobiles.
This illustrates a few points. The first is that without trade we'd all be stuck with whatever we could produce from the raw materials in our immediate surroundings. That's a particularly relevant point if you live in say, Iceland or Saudi Arabia. Trade introduces variety into our lives, and the more people we can trade with the better.
Another point is that it shouldn't matter where the places are that I seek to trade with. Why should it be regarded as better for the Iowa farmer to send his corn to Detroit (or, more realistically these days, South Carolina) in exchange for cars than Japan? Ultimately it is a transaction between me and that other person whose citizenship or location should be of no relevance. Democrats, who tend to be self-styled citizens of the world, should think long and hard about this.
Lastly, it can be helpful to think of free trade as simply a machine or mechanism. If I were to replace two workers with a machine I suspect that most people wouldn't bat an eyelid. This is rather commonplace and has been occurring for quite some time, yet it hasn't pushed up unemployment and made us all penniless. Indeed, if you look at unemployment rates over the past 50+ years you generally see rates fluctuate from 3-10% -- it hasn't gotten worse as our economy has become more mechanized and computerized. In fact, it has made us richer, enabling us to do more with less -- which is the whole secret to prosperity in the first place.
Now, if instead of replacing two workers with a machine imagine that a business owner simply decided to have the jobs performed in Mexico. Really it's the same principle, just instead imagine that the machine was labeled "Mexico." In our story the farmer uses a machine called "Japan."
This story may seem like a childish way of addressing a serious topic, but I think that it holds some lessons the Obama Administration's would do well to heed.
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