[OFB Cafe] lightening

[Peter Hollings]

Well, fine, suppose I accept all your assumptions and conclusions 
including an expected result of the policies that we will experience a 
"a relative diminution in our standard of living ".  The question I am 
asking is if a) this was sold to us as a desirable policy outcome, or b) 
this was an outcome concealed from us in the interest of attaining it 
for the benefit of narrow interests.

Peter Hollings

saki wrote:
> Peter Hollings wrote:
>   
>> Hi, Terence, no offense intended. Wish I could share your optimism about 
>> the economy.  Take a look at http://www.lewrockwell.com/orig9/quinn5.html .
>>
>> Comparative advantage is a useful concept when considering things like 
>> resource costs, but aren't we really dealing here with labor cost 
>> arbitrage? And what about the transitional costs that comparative 
>> advantage ignores? Have the gains from cheap Chinese imports at Wallmart 
>> exceeded the costs of lost jobs and have the winners compensated the 
>> losers? It seems to me that if we cannot produce something that others 
>> want to buy and if we continue to run a trade deficit then we will 
>> ultimately have to sell off our hard assets to foreigners.
>>
>>     
>
> I don't deny that there will be winners and losers in the to-ing and 
> fro-ing of the global market, but you have had over fifty years of 
> growth and well-being in which the cost of labour has risen well beyond 
> that of the emerging economies (as Europe has also found). And the 
> winners will not compensate the losers- did we ever do that?
>
> I was also using "comparative advantage" in an holistic way -resource 
> costs, labour, transport and Government-imposed costs, as I think labour 
> costs are only part of the story. In this country a vast percentage of 
> "profit" in personal wages and company earnings are taken by the 
> Government, and so cannot be reinvested in research, new investment etc..
>
> Finding other sources of profit and new industries is what the developed 
> world has been good at, and may well continue to be. There will 
> adjustments made in comparative wealth, obviously, and I think in the 
> short/medium term the developed economies will suffer, but Western 
> Europe and the US still hold a vast amount of the world's wealth.
>
> As for the cheapness of clothes in Walmart and the loss of jobs in the 
> US clothing industry, who makes the comparison linking the two when 
> shopping for a bargain? (and do you actually have a local choice of 
> buying American any more? Except perhaps at the top end of the market?).
>
> I think that perhaps there will be a levelling of income a standards of 
> living in the future as the emergent economies come closer to ours, and 
> are in turn pushed by other just emerging economies.
>
> This may mean a relative diminution in our standard of living, but it 
> will still be a lot higher than in most of the world, I would think.
>
> Comments?
>
> Terence
>
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