Bravo Mr. Bush
President Bush has decided to reverse his totally unprincipled decision to impose steel tariffs.
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Comments (15)
of course, after two years, the damage is done and there won't be any penalties. he (or anyone else) can just do it again.
big deal, effects none of us directly. it was obvious that sooner or later the tariffs would go.
Funny that... "the damage is done" & "effects none of us directly". What world do you live in? I live in Brazil - and despite the fact that this measure (positively & directly) affects my country's steel exports, I'm glad that it's finally been done because of its other impacts in world economics and foreign trade policies.
Danis, do you think Brazil (major steel player) would rather export steel to Hungary (seeing your e-mail address) or the US? Don't you think that affects Hungary's bargain power when looking for suppliers? Becoming a EU state next year doesn't guarantee supplies - in fact Hungary's foreign trade deficit (+ imports - exports) indicates an even greater need to have foreign bargain power. Specially in such a matter as steel tariffs, seeing Hungary's metallurgy is significant industry. Talk about effects...
"The damage is done" but it is better late than ever. And it does affect everyone, even indirectly. The US is discussing the Free Trade Agreement of the Americas with the rest of the continent as slow as humanly possible. This happens because they do not negotiate, instead they procrastinate so they don't have to give up anything. This measure certainly doesn't create jurisdiction or anything of the likes, but it does create a precedent for future negotiations. In the FTAA or other forum.
What's more appalling is that Bush hadn't yet done this solely because of earlier expectations that the US steel industry might support his re-election. Now that this is an obvious no go, it's an easy cut. Hurray for the rest of the world.
I'm certainly surprised to see a debate on the merits of product tariffs on this particular webspace. Not exactly the topic de jure, but that's okay... I'll bite.
I wonder if the Prof. might explain how a government, faced with the mass exportation of jobs to countries with extraordinarily low labor and environmental standards, is supposed to react without resorting to trade tariffs? I am by no means an opponent to Free Trade (although in my undergraduate years I marched in the Seattle WTO protests... its been four years since then and I've changed a lot politically) I'm still very concerned about the limitations such agreements place on industrialized nations to insist upon high standards.
Assume for a moment that our globe was one giant happy free-market system without government intervention and all the perfect information you could stomach. In such a world, consumers would be free to impose their sense of appropriate standards by purchasing goods they know meet those standards. I could simply walk onto a car lot and select the car produced by fair labor standards and in an environmentally sound manner. I suppose the info would be right there on the sticker for all to see, diagrams and everything!
But in the real world such a plan is bogged down my transaction costs. Its simply too expensive for me, as the consumer, to research my purchases to the extent necessary. So, I do what any good American would do... I express my interests to my government who then goes about lowering those transaction costs for me. In the case of health, the government is nice enough to mandate nutrition specs for all the food I wish to buy (a whole bunch easier then bringing my homemade crucible to the grocery store so I can do a calorie test). In the case of environmental and labor standards, the government imposes a cost on those goods which indicates to me (via the increased prices) that these goods did not meet my expressed interests and thus will cost more to purchase.
Given the choice between cheaper with lower standards and expensive with higher standards, I would like to believe I would go with the higher standards. But absent that information, I ask of my government to provide different kinds of signals to assist in those purchases. The steel tariffs may not have been such a decision in the particular, and may not have helped the consumer... but tariffs properly applied are really the consumer's best hope to ensuring their standards are met.
So Bush caved.
Boo.
We should be standing up and pointing out that the WTO, like NATO, is WORTHLESS as long as nations with crap-ass environmental standards and wage standards like India are soaking away our jobs left and right.
And shame on you Lessig for not seeing that.
This message is for Mike....
If they will do the same work for cheaper then what's wrong with that. Won't that bring us closer to having a world economy instead of always protecting U.S.'s interests.
I think that you've become to accustomed to the way of life you've been given that you now think it's your right just because you are a U.S. citizen. If anyone should be crying foul it's people from foreign countries that don't have anywhere near the opportunities that we have in this country.
I'm chearing because I'm seeing it as the world balancing out.
Stop your whining.
-Jeff
When we can no longer produce steel in the United States because of "free trade" -- a republican treehouse codeword for "cheap foreign labor" and "decreasing domestic wages" -- where will we be then?
Where will we be when Intel produces 95% of its chips in Communist China, effectively giving this criminal regime its keys to our technological kingdom?
Mr. Lessig, I respect you and your work, but if you believe that NAFTA, WTO and the concept of "free trade" are anything more than the Wal-Martization of our culture -- that is to say, everyone living in trailers, except those of you who live high up on the hill -- you're just plain wrong.
Sincerely,
Jim in LA
Cal 85
Jeff:
If anyone should be crying foul it’s people from foreign countries that don’t have anywhere near the opportunities that we have in this country.
To whom should the be crying foul? Does the US have some obligation to make sure that people in other countries have the same opportunities as us? I'm not a big fan of tariffs, but I find rather odd your implication that our government should in some way answer to non-citizens.
it is true: I believe the following -- (1) left/right lines are devices for stopping real thought, and (2) I believe in real free trade, and so (3) this makes life difficult for a Democrat, because we don't seem to have a Clinton free-trade candidate, but (4) that doesn't quite mean I'd support President Bush for reelection. There are, alas, other issues out there.
I'll be for the first party to advocate ending farm subsidies. That's the real free trade issue. Neither Republicans nor Democrats will take on that issue, but if you want to talk about world poverty, then the $300billion spent each year to destroy developing nations farming markets would be an important place to begin the discussion.
I can not believe the type of narrow-mindedness I'm seeing here. For a lot of people their jingoism clouds their vision of the greater economic benefits of Free Trade. Jobs that are being exported to countries like India are jobs that can be easily replaced, and are generally low skilled (IG: Call Centers). Elementary macroeconomics teaches us that despite losing jobs because workers in other countries will work for less, the labor force is about to diversify itself and recover. A perfect example can be seen in the lasting effects of NAFTA (Clinton incidentally), and the exportation of jobs to Mexico.
Aside from this, the benefits of bringing other countries into the fold of prosperity far outweigh the fleeting disadvantages. Look down the line in ten years, and the generation of children brought up in an India which has been fueled by technological growth (backed by American Business Dollars) and progress will be far better educated, and will...I hate to break it down in these terms...but be far better consumers. They will demand the same type of services and products that we as consumers here enjoy. Who do you think will make these products? In a lot of cases...American companies.
Now...when an American company opens up shop in another country...to use Jim's example, Intel (which will incidentally never happen, due to the language barrier that exists in China. India is a much more feasible, and Intel already has a multi-billion dollar operation there) sets up an operation in China manufacturing chips (speaking of which most of Intel (and AMD's) chips are made overseas already anyways) the money that is generated by selling said chips in China comes back to the United States and gets deposited in American coffers anyways. The increased demand for products worldwide thereby increases the demand for labor everywhere...and forces countries with capital / labor forces to diversify further and specialize in order to gain a comparative advantage in different fields. Right now, the United States is moving towards a "services" oriented economy.
Now, to say that we should bring the entire world population up from their penury and completely level the playing field is a bit naive and not very feasible at the current crossroads in time. That being said...I'm just trying to say, look a little further than the direct effects of Free Trade on the United States. The potential benefits for ourselves and the rest of the world are staggering.
Moving onto the topic of ending farm subsidies, I can not conclusively say I believe that would really solve the problem of world poverty. There are numerous other factors at play here, however its obvious that SOMETHING needs to be done to control it.
I apologize for my long winded-diatribe.
- Naj Srinivas
UCSB
Class of '05.
Well said David. I'm inclined to quote Nathaniel Branden on this one...
"We do not hear the term 'compassionate' applied to business executives or entrepreneurs, certainly not when they are engaged in their normal work. Yet in terms of results in the measurable form of jobs created, lives enriched, communities built, living standards raised, and poverty healed, a handful of capitalists has done infinitely more for mankind than all the self-serving politicians, academics, social workers, and religionists who march under the banner of 'compassion'."
Reply to Livia. Of course, I agree with you substantially (and I might have exaggerated a bit), but the whole issue is not relevant on this page.
Also I reserve the right to be happy politically only if something positive happens compared to my values in absolute terms. Though I may be pleased with the Bush decision, I definitely wouldnt bravo. He should have never taken the original decision in the first place. I was not happy when he did that and it was not in line with a free trade agenda either. (Its another question that the Bush administartion has no clear industrial agenda other than the industry which pays more for a particular act, decision etc. gets it).
You're absolutelly right Danis.
When we look at problems like this from a purely economic point of view, we are simply being lazy. While the "left/right distinction impedes real thought", so too does economic analysis. The Posner-like analysis is appropriate in certain contexts (like whether it is efficient to waste our time reading anything in his opinions except for the facts and the holding), but in the realm of labor, the current widespread lack of jobs is due to a stiff reliance on economic rationale and instrumental thinking. When we begin to enrich our understanding of these problems with a more sophisticated understanding of human persons (more than simply as maximizing consumers), then we will engage in "real thought" and serve the interests of more than the private interests and the "economists" (pseudo-scientists/pundits) who serve the interests by making their clearly selfish, disgusting policies seem "rational".
And, regardless of left/right, repub/democrat, Bush is the single worst president in American History -- Happy President's Day.