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07/25/2010

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Joshua Norman

@NEH:

I agree with your posts particular regards to the fact that the developing countries grow their economy by utilizing their massive pool of coolies to take jobs away from Americans with the help of the Quisling CEOs and their creed of greed.

That is the reason why I specifically advocate putting tariffs on imports from the Third World. Since Indians are willing to accept living standards that would make a billygoat puke, they have a cost advantage right there. A tariff would counter that. Cutting taxes on US business operations for US headquartered companies would further encourage them to operate their businesses in the US.

Joshua Norman

@Pradeep:

I'll agree with you on one thing. America needs to roll back the dumb rules and stupid things that prevent it from reaching its potential. However many of these rules were promulgated by left-wing Democrats from the countries that have leftist-statist cultures as well as supposed by the weak-willed me-too RINO Republicans like Juan McCain, Lindsey Grahamnesty, Orrin Hatch, Bailout Bob Bennett, Susan Collins, Olympia Snowejobs & Sam Brownback.

If you really liked America, you wouldn't be calling its citizens spoiled whiners. Why should Americans engage in dog-eat-dog competition with people who are willing to live 4 to a 400 sq apartment, have one Tata firetrap, and work 16 hours a dayt for a pittance? How will businesses sell their goods and services if they make it impossible for people to buy the goods and services sold?

Repeating what I said earlier, to counter the deplorable living standards of India, China and the rest of the Third World, America should be putting tariffs on imports from the Third World. The revenue raised by tariffs would be utilized to reduce taxes for individuals and businesses. This achieves your objective in that it increases liberalization for businesses as well as ensures that Americans don't engage in conspicuous consumption of foreign goods as well as countermands the export subsidies that India, China, Japan & the EU put on their products.

The only reason why you have you job is because you're willing to scab for a lower price. What happens if your heroes Gates, Ellison & Jobs decide to outsource your job to Pakistan or Bangledesh, the people there have lower living standards than you guys.

NEH

Interesting. Just a general comment, If the U.S. were to operate in it's own Economic and Labor interests, there wouldn't be much need for the discussion of the extension of Unemployment Compensation. Either Pro or Con.

Perhaps it's time we returned to the "American System of Economics" as espoused by Henry Carey and others. Which is, the system, basically adopted by the "emerging economy" Nations with the addition of holding its Labor pool in bondage. As for Adam Smith and the "Wealth of Nations", time to toss that text and it's misunderstood conceptions in the "trash".

Brian Davis, Austin, TX

@Joshua:

It's not like we don't already have enough unemployed and underemployed Americans well-qualified to be corporate execs, i-bankers, traders, and government workers who would jump at the chance, and at considerably lesser pay + perks than Wall St and Washington, D.C. are hell-bent to protect for incumbents. They're on their own. I won't try to make excuses for G.W. Bush. He should have shown Hank Paulson the door and let the false bottom drop. We wouldn't be in any worse shape now than we're in.

CJ

Ok..I live in California and have been unemployed since November 2008. Couple of points to ponder folks..I not only NEED a job, I WANT a job. If you have a job then consider yourself not only fortunate, but blessed as well. If someone in this Golden State told me today that I needed to have a job within 24 hours or forfit my life then I guess I would be DEAD!!! Hire me please!!!!

Aaron

"The fact that not all persons who have been unemployed for a substantial period of time are hardship cases reinforces my concern that extending unemployment benefits will cause disemployment."

This should be easy to test. From what I understand, the number of open positions is tracked and that there are statistics concerning the number of open jobs - so in a "normal" economy 3% of jobs are unfilled, and 2% in a down economy. So... let's do the math. Has there been a correlation between the extension of unemployment benefits and an increase in the percentage of unfilled jobs?

And let's look at another statistic that rarely comes up in these debates - the number of unemployed workers per job opening. According to Bureau of Labor Statistics numbers published in The Economist, in 2007 it hovered around 1.5. At last count, earlier this this year, it was at just below 5, down from a high of about 6.5 (give or take). If these numbers are correct (and I never see anyone challenge them), that means for the 2.3 million persons receiving jobless benefits, there are about 485,000 jobs. If cutting benefits completely forces all of those jobs to be filled what do you do with the other roughly 1.8 million people? It's never explained how withholding benefits does anything to reduce that number.

It's not that I have a knee-jerk negative reaction to the idea that extending unemployment benefits lowers the incentive to find work. On its face, it's a logical idea. But there are questions that a little research raises that proponents not only never seem to answer, but that they appear to actively shy away from. And this lends the argument an air of being based on faith. And the problem with faith is that it succeeds to the degree to which it is NOT subject to tests of proof.

Joshua Norman

@NEH:

"Interesting. Just a general comment, If the U.S. were to operate in it's own Economic and Labor interests, there wouldn't be much need for the discussion of the extension of Unemployment Compensation. Either Pro or Con.

Perhaps it's time we returned to the "American System of Economics" as espoused by Henry Carey and others. Which is, the system, basically adopted by the "emerging economy" Nations with the addition of holding its Labor pool in bondage. As for Adam Smith and the "Wealth of Nations", time to toss that text and it's misunderstood conceptions in the "trash"."

Japan, India, China, the EU and all our "trading partners" act in their own interests, which is to grow their economy and their balance of trade.
The US politicians follow their interests. Unfortunately those interests are the following:
1. Increasing the power of government over the lives of Americans.
2. Getting positive liveshots & PR from the state-controlled media.
3. Following the orders of the 42K lobbyists in this country, many of whom are exp-politicians and staffers

That is one of the reasons why America is in decline.

Joshua Norman

Brian Davis say
"@Joshua:

It's not like we don't already have enough unemployed and underemployed Americans well-qualified to be corporate execs, i-bankers, traders, and government workers who would jump at the chance, and at considerably lesser pay + perks than Wall St and Washington, D.C. are hell-bent to protect for incumbents. They're on their own. I won't try to make excuses for G.W. Bush. He should have shown Hank Paulson the door and let the false bottom drop. We wouldn't be in any worse shape now than we're in."

Allow me to retort. We are in a labor market depression. No net nonfarm jobs have been created since the beginning of 2000. You are right, we have plenty of unemployed & underemployed educated people. We have AVPs in i-banking migrating to junior research associate jobs with conservative bond mutual fund teams, we have investment consultants migrating to junior plan sponsor analyst jobs, we have performance measurement managers migrating to performance measurement analyst staff roles, and plenty of other examples of people leaving one job to take another job lower on the totum pole. In short, we are in a race to the bottom. Since the US in a race to the bottom, why should we accelerate it by giving amnesty to millions of illegal aliens as well as importing over 1.1 million legal immigrants and signing "free trade deals".

I feel that if the unemployed have to give up their benefits, then business needs to give up its addiction to cheap exploitable labor from the Third World.

You say you won't make excuses for El Decidir Jorge Bush. Can I assume that you are regretting his attempts to pass amnesty as well as the increased legal immigration under W as well as Bush Senior. During the years Jorge Bush occupied La Casa Blanca, the offshoring of American jobs to Third World countries with exploitable labor accelerated. I hope you regret that too.

Brian Davis, Austin, TX

Joshua, pay attention. In the U.S., we've had a federal law going on 100 years now; it's called the Clayton Act. One part of it declares (I'm doing this on memory): "The labor of a human being is not an article of commerce." No kidding. And since then, we've legalized labor union organization and representation via mandatory collective bargaining, we've pulled organized labor loose from the antitrust laws, we've enacted all manner of workplace health & safety laws, and we've massaged the Internal Revenue Code to encourage employers to provide employees (and their dependents) with retirement benefits, life insurance, and healthcare coverage. But let me drop the other shoe: American law is NOT "extraterritorial." That's simply a recognition that what happens within the territorial sovereignty of another nation is its business, not ours'. Only when Congress has made it crystal clear that a U.S. law is intended to apply to behavior abroad - even affecting Americans abroad - and regardless of that behavior's boomerang impact on U.S. domestic society or commerce, will it be so enforced by U.S. authority. In short, we don't rule the world. We're part of it, but we have to live with what we're part of. In the military there's an old saw that every green boot learns from the time he/she digs that first latrine. It goes: "There's nothing cheaper than a GI." It's so microcosmically true of life most places on this planet: Human life is the cheapest of all commodities. That axiom transfers directly to human labor. It also still happens to be the public policy preference of most people who have managed to aggregate control of capital and political power - doesn't really matter whether you're talking about the U.S., China, Mexico, India, or Africa. We're simply more humane in how we allow this law of the jungle to be practiced in public. The U.S., Canada, most of Europe, Israel - that's about it, although I do look for South America largely to swing our way; they've seen Chavez's and the Perons'. It also explains why we can't keep out the illegals from Mexico. It's not about coming here for our jobs and our social welfare largesse. It's about survival.

martha

Pradeep’s global perspective is enlightening. We do actually have Americans whining because after 10-20-30 years of making more than 5-10 times the average worldwide income, they never saved a penny, and now someone else has to pay.

Joshua Norman

@Martha:
"Pradeep’s global perspective is enlightening. We do actually have Americans whining because after 10-20-30 years of making more than 5-10 times the average worldwide income, they never saved a penny, and now someone else has to pay."

Americans may make more money than most of the world. However the cost of living in America is higher than the Third World hellholes that millions of people wish to leave every year.

Joshua Norman

Brian said:
"Joshua, pay attention. In the U.S., we've had a federal law going on 100 years now; it's called the Clayton Act. One part of it declares (I'm doing this on memory): "The labor of a human being is not an article of commerce." No kidding. And since then, we've legalized labor union organization and representation via mandatory collective bargaining, we've pulled organized labor loose from the antitrust laws, we've enacted all manner of workplace health & safety laws, and we've massaged the Internal Revenue Code to encourage employers to provide employees (and their dependents) with retirement benefits, life insurance, and healthcare coverage. But let me drop the other shoe: American law is NOT "extraterritorial." That's simply a recognition that what happens within the territorial sovereignty of another nation is its business, not ours'. Only when Congress has made it crystal clear that a U.S. law is intended to apply to behavior abroad - even affecting Americans abroad - and regardless of that behavior's boomerang impact on U.S. domestic society or commerce, will it be so enforced by U.S. authority. In short, we don't rule the world. We're part of it, but we have to live with what we're part of. In the military there's an old saw that every green boot learns from the time he/she digs that first latrine. It goes: "There's nothing cheaper than a GI." It's so microcosmically true of life most places on this planet: Human life is the cheapest of all commodities. That axiom transfers directly to human labor. It also still happens to be the public policy preference of most people who have managed to aggregate control of capital and political power - doesn't really matter whether you're talking about the U.S., China, Mexico, India, or Africa. We're simply more humane in how we allow this law of the jungle to be practiced in public. The U.S., Canada, most of Europe, Israel - that's about it, although I do look for South America largely to swing our way; they've seen Chavez's and the Perons'. It also explains why we can't keep out the illegals from Mexico. It's not about coming here for our jobs and our social welfare largesse. It's about survival."
OK, then to combat American law not being "extraterritorial", then lets tariff all foreign made goods and services. An American pays more taxes on domestically produced goods and services than foreign made junk. We need to reverse that. We also need to adjust the tariff to reflect the Third World living standards of Asia, Africa & Latin America.
"We don't rule the world. We're part of it, but we have to live with what we're part of" OK, does this mean that we can stop doling out foreign aid to Third World countries that hate us anyway? Does the world appreciate that we pay the highest dues to the UN as well as other multilateral aid agencies? How about that we defeated Nazi Germany, Imperial Japan, the British Empire, the Ottoman Empire, the German & Austro-Hungarian Empires, the Soviet Evil Empire, Saddam Hussein and the Spanish Empire and that we were responsible for the independence of Cuba, Liberia, Poland and Afghanistan (twice) the Filipino Islands, Panama, Kosovo & Bosnia and Herzegovina.

The last third of your post makes the best case for my 5 point plan. In the primitive backward Third World, human life is cheap. America became an economic superpower because it created conditions that allowed its workers to share in the economic production and growth. The European economy presumed that low wages were crucial to profits, just like the sophomoric economics of today's open borders crowd. In contrast to Dickensian Europe, with its Scrooge-like obsession with cheap labor, Americans traditionally enjoyed high wages because the country was underpopulated relative to its natural resources. This inspired American entrepreneurs to invest in labor-saving innovations, which, in a virtuous cycle, allowed even higher wages to be paid.

The most famous example: Henry Ford doubling his workers' salaries in 1914 after inventing the moving assembly line.

In the long run, the cheap labor obsession debilitated the English economy. After the brilliant innovations of the early Industrial Revolution, the English textile industry tended to stagnate. Paul Johnson explains:

"Factories paid higher wages than domestic industries; all the same, they were very low, chiefly because most of the factory hands were women and children. Low wages kept home consumer demand down; worse still, they removed the chief incentive to replace primitive machinery by the systematic adoption of new technology."

And then there was the long run impact on Britain's economic culture:

“State limitations of human exploitation came too late, and were too ineffective, to make the quest for productivity a virtue; the English did not discover it until the twentieth century, by which time the trade union movement had constructed powerful defenses against it."

Victorian Scroogeonomics helped engender its own nemesis. It drove the British working class far to the left of the American working class, leading to both the nationalization of major industries in the 1940s and a hatred of productivity improvements among unions, exemplified in the 1959 Peter Sellers' movie I'm All Right, Jack. The effects on the U.K. economy were disastrous. As late as the mid-1980s, Margaret Thatcher had to fight a fierce battle for control of the economy against the Stalinist boss of the large coal miner's union, Arthur Scargill.

In the U.S., however, miners became less and less a force for radicalism as the success of John L. Lewis, boss of the United Mine Workers of America 1920-1960, at winning higher pay lowered both their leftism and their numbers.

Lewis acknowledged that he was driving miners' wages up so high that his union would be much smaller in the next generation. But if his members were paid enough today, they could afford to educate their kids to do something less miserable with their lives by the time the bosses had figured out how to do without them.

If you can convince me why America needs to allow an unlimited supply of the world's poor into the country when we are in the middle of a labor market depression and why Americans should pay higher taxes on domestic made goods and services versus imports, I will have an open mind. However your argument only reinforces why this country needs to rationalize its trade & immigration policies.

Pradeep K

Joshua, The prosperity dynamics that you face are:

My peers and I in India, in exchange for a 500 sqf house and a Tata car are writing software and innovating every day, doing things that no one has ever done before to develop the brains of, say, the robotic arms that drive factories around the world.
…And you want other people to build you two Corollas and a 2000sqf house in exchange for the service of mechanically pushing the buttons on my robotic creation, making cars at GM?!! Good luck! You simply cannot legislate away this productivity/compensation disparity. As I said, you either increase (the already high) economic efficiency of your society further, or, in a mere generation you fade away into worldwide averagedom (i.e. much lower than where you are now, in relative terms). You have an exceptional standard of living because in the last 100 years you had the most exceptionally free economy compared to the rest of the world. You must maintain that exceptionalism if you want to stay exceptional. But, as I said, while we are moving towards a freer economy, your economic liberalization has stalled and perhaps even reversed course.

The fact that your current economic recovery is so much weaker than one would expect (given the fact that deep recessions are typically followed by strong rebounds) is an indication that you have already started your decline into averagedom.

Whatever protectionist legislation you may perhaps successfully enact to try to maintain artificial economic distortions, will be a very short lived “fix” as it will further erode the overall competitiveness of you country by making the business climate even more hostile to production and innovation (higher labor costs, less competitive products, decreased incentives to produce for both rich and poor). Not only that, but trying to go against economic fundamentals with legislation is also the recipe for the creation of a bubble crisis.

The mechanical analog of trying to go against economic fundamentals with legislation is similar to trying to stop a river with a dam. You cannot stop a river by building a dam and expect all the water that comes down to stay on the other side of the dam forever. It will soon come through via the overflow outlet or, if you provide no outlet, the water will soon break the entire dam and cause you even more pain and waste than if you had left the river flow in the first place.

Joshua Norman

Pradeep says:
"My peers and I in India, in exchange for a 500 sqf house and a Tata car are writing software and innovating every day, doing things that no one has ever done before to develop the brains of, say, the robotic arms that drive factories around the world."

I've worked with Indians. I've never know them to be good for anything or than data entry. And some of them still screw that up.
I once worked as a consultant for an offshore outsourcing initiative with the business operations unit of the global asset management business of a multinational global investment bank. The company was mesmerized by their credentials and their willingness to work for such little compensation relative to their American workers. However, when it came time for them to do their jobs, their work did not reflect their "credentials"
Some of the problems I encountered with my Indian colleagues:
Communication: I never heard about problems until it was way past the deadline. It seems to be a cultural thing there. It seems they lose face they let someone know they don't know what they are doing or that the result is below par.
Infrastructure: I then decided to take the bull by the horns and call them to check in on them. The electric, Internet and phone connections were awful and many times I was not able to get through. In the few times I was able to get through, they'd say whatever they thought I wanted to hear, as opposed to giving me the answers I needed.
Unstable workforce: People were leaving constantly to work at other vendors on both the American side and the Indian side.
Micromanagement: One of the Indian ladies that was stateside, whenever the manager was not around, she would be spending her time making personal phone calls.
Cost: While the Indians were making 80% less than the Americans and working twice the hours per person, they needed to retain a third of the American on shore staff, they needed to hire twice the number of Indians as legacy Americans and the Americans that stayed needed to travel to India frequently to oversee operations. Since they didn't end up saving the money that Tata Consulting Services promised, they ended up moving the operation back stateside.
Quality: In short Relationship Managers told me that the work performed in India was so poor and late, they ended up losing client contracts.
I guess this experience proved Oscar Wilde right. The management of this company are cynics. They knew the cost of everything and the value of nothing in the business operations unit.

Pradeep says:
"…And you want other people to build you two Corollas and a 2000sqf house in exchange for the service of mechanically pushing the buttons on my robotic creation, making cars at GM?!! Good luck! You simply cannot legislate away this productivity/compensation disparity. As I said, you either increase (the already high) economic efficiency of your society further, or, in a mere generation you fade away into worldwide averagedom (i.e. much lower than where you are now, in relative terms). You have an exceptional standard of living because in the last 100 years you had the most exceptionally free economy compared to the rest of the world. You must maintain that exceptionalism if you want to stay exceptional."
I don't work at GM. I'm a financial professional. If I found that a piece of software was working on by Indians, I'd be concerned that there are bugs embedded in the code. And I don't have Two Corollas. I don't even like Toyota. Too Often Yankees Overrate That Automobile. Nor do I want to see the construction jobs filled by illegal aliens nor the auto assembly jobs by offshore Mexicans & Asians.
"But, as I said, while we are moving towards a freer economy, your economic liberalization has stalled and perhaps even reversed course." I had no idea that the debate was going to talk about if America was liberalizing or not. However America will never pursue the previous course of "economic liberalization" as long as we keep importing millions of Latino gangbangers & rapists, rote learning Indians, spying Soviets and conniving communist Chinese. None of these people come from countries with a long history of individual rights and economic freedom.
Pradeep says:
"Whatever protectionist legislation you may perhaps successfully enact to try to maintain artificial economic distortions, will be a very short lived “fix” as it will further erode the overall competitiveness of you country by making the business climate even more hostile to production and innovation (higher labor costs, less competitive products, decreased incentives to produce for both rich and poor). Not only that, but trying to go against economic fundamentals with legislation is also the recipe for the creation of a bubble crisis."
As opposed to the mercantilist Indian & Chinese trade policies where you guys subsidize you exports and slap tariffs on imports to your country?
http://uk.reuters.com/article/idUKTRE62352620100304
http://www.business-standard.com/india/news/eu-concerned-over-rising-protectionism-in-india/357331/
http://www.nationmultimedia.com/2006/08/11/opinion/opinion_30010811.php

richard lewis

@Pradeep. A little off-topic but I'd like you to respond to this question: if what you say about the over-priveleged bottom 50% of US citizens is correct I presume you'd be quite happy to arrange for the Government of India to allow any number of these people (including 100's of thousands with advanced degrees and almost all with fluent english) work visas for India, where they could immediately put out of work almost all those white-collar Indians currently working in international service sector jobs and enjoy India's extremely low cost of living? I suspect many would move, given the opportunity. If that idea doesn't appeal then maybe you could reconsider your 'free market' dogmatism? In other words, doesn't the state promise something to its citizens over and above their market value?

Pradeep K

My point, and its relevance to unemployment benefits folks is that: you can force the productive sector of your economy to support the less productive, through unemployment benefits and other transfers. But that will only decrease the competitiveness of your own economy at a time when the competitiveness of 4+ billion people in this world is on the rise. The fact that most of you Americans seem poised to intensify these transfers in response to economic distress, only seals your fate of decline into worldwide economic (and by consequence political) marginalization.

Joshua Norman

Pradeep Says:
"My point, and its relevance to unemployment benefits folks is that: you can force the productive sector of your economy to support the less productive, through unemployment benefits and other transfers. But that will only decrease the competitiveness of your own economy at a time when the competitiveness of 4+ billion people in this world is on the rise. The fact that most of you Americans seem poised to intensify these transfers in response to economic distress, only seals your fate of decline into worldwide economic (and by consequence political) marginalization."

I proposed a plan that would REDUCE unemployment benefits and other public assistance transfer payments on this thread and the other one and you responded by babbling nonsense about "American economic liberalization" as well as calling it protectionist and closing themselves up inside their borders and then legislating economic inefficiency. My p;an would also cut tax rates for individuals and businesses.
Once again you failed to respond to the fact that the EU and the Asian countries have tariffs on imports and subsidization of their exports. You're so big on "economic liberalization" I'm sure you can come with rationale as to why India should be permitted to subsidize their exports to the US and put tariffs on imports from the USm whereas the US must play the free trade sucker for the rest of the world? Perhaps you can also explain why India, China and about 150 other countries are exempt from the various multilateral global environmental control treaty provisions, such as the Kyoto Accords. Also explain to me how the US can become more competitive economically if they have to keep absorbing millions of the world's economically uncompetitive people. How can the US comply with the various environmental emissions control treaties by importing over 1 million new mouths to feed each year, only 10% of whom have the advanced education and skills that you hear about in the media.

Buddha

Here is an odd data point for everyone. Over the past few weeks I have spoken with two of our corporations HR Directors. Both of them independently commented that they had experienced some odd behavior recently. A small but significant percentage of individuals who were offered jobs either declined or asked if they could but delay their start date by 1-2 months. Why? Because they wanted to tap out their unemployment before they accepted new employment. I found this incredible and when I mentioned it to a neighbor last week he nodded and said he had experienced the same thing the month before when he was attempting to fill a regional sales manager position.

Pradeep K

Joshua, your reasoning is so upside down that you attribute our economic ascent to protectionism.

You, Westerners suddenly started noticing the ascent of the BRIC countries and what you (correctly) see are economies that are still not very free indeed. However, it is not the remaining protectionism that you see, that is responsible for our economic ascent; but rather, the protectionism we eliminated so far. Before that, we had so much protectionism, such closed economies, and by consequence were so poor, that you Westerners did not even notice our existence (and our once all encompassing protectionism and state controlled economies).

In short, while there are winners and losers, the net effect of protectionism within any one country, is negative. India and other countries are still engaging in some protectionism at their own detriment. Protectionism is essentially: “Someone else, within my country pays for my low worldwide competence”. Who pays? Typically consumers. The reason I have to buy a Tata as opposed to a Peugeot or a Fiat (though to you that may hardly seem as an improvement over the Tata), is that I have to pay a high import tax (the tax indirectly going to the Indian Auto Worker who cannot stand up to Wolkswagen on his own).

Once again, it is not that per capita productivity in India is approaching US levels. You are still freer and thus more productive, per capita. But, roughly speaking, there are 3 of us BRIC people for each one of you Westerners. Unless your productivity remains 3 times ours, forget the privileged position of prosperity you seem to have become so accustomed to. Following recent (albeit partial and modest) economic liberalizations in our countries, our per capita productivity has risen and is rising fast, while yours is stalling and perhaps even reversing course. Are you going to be able to maintain the 3 to 1 productivity ratio? The way the majority of Westerners seem to be thinking these days, Very unlikely!

Joshua Norman

Buddha says:
"Here is an odd data point for everyone. Over the past few weeks I have spoken with two of our corporations HR Directors. Both of them independently commented that they had experienced some odd behavior recently. A small but significant percentage of individuals who were offered jobs either declined or asked if they could but delay their start date by 1-2 months. Why? Because they wanted to tap out their unemployment before they accepted new employment. I found this incredible and when I mentioned it to a neighbor last week he nodded and said he had experienced the same thing the month before when he was attempting to fill a regional sales manager position."
Those people must not be very bright mathematically. They would be making more moeny by working instead of running out their unemployment benefits.

Joshua Norman

Pradeep Says:
"Joshua, your reasoning is so upside down that you attribute our economic ascent to protectionism.

You, Westerners suddenly started noticing the ascent of the BRIC countries and what you (correctly) see are economies that are still not very free indeed. However, it is not the remaining protectionism that you see, that is responsible for our economic ascent; but rather, the protectionism we eliminated so far. Before that, we had so much protectionism, such closed economies, and by consequence were so poor, that you Westerners did not even notice our existence (and our once all encompassing protectionism and state controlled economies)."

Considering that India's average effetive tariff rate is 11% higher than America's. I propose that India either lower it or America increase tariffs by 11% on all Indian imports. Plus India has twice the non-tariff trade barriers as the US. Finally India still has an average export subsidy rate that is 2% higher than the US. I propose that India eliminate it immediately or the US should increase tariffs by an additional 2%.

Pradeep says:
"In short, while there are winners and losers, the net effect of protectionism within any one country, is negative. India and other countries are still engaging in some protectionism at their own detriment. Protectionism is essentially: “Someone else, within my country pays for my low worldwide competence”. Who pays? Typically consumers. The reason I have to buy a Tata as opposed to a Peugeot or a Fiat (though to you that may hardly seem as an improvement over the Tata), is that I have to pay a high import tax (the tax indirectly going to the Indian Auto Worker who cannot stand up to Wolkswagen on his own)."
FIAT-Fix it again Tony! The US had been clinging to free trade like a battered wife clings to her abusive husband. It's as if the US has a collective case of Stockholm syndrome. The effective of protectionism by other countries has been gains by the other countries at the expense of the US. Considering that those Tatas are fire traps you may want to buy an import. We Americans had a long and proud tradition of excellence in automobile manufacturing before the Japanese & Koreans flooded our markets with their cheap subsidized automobiles. You should have been buying from Americans in Michigan instead of trying to make it in India.
http://www.huffingtonpost.com/2010/03/25/tata-nano-exlpodes-in-mum_n_513640.html
According to the Index of Economic Freedom, the US has much higher overall economic and trade freedom than the rest of the world. The only two categories where they trail the world involves taxes and government spending. Since I've proposed plans to cut taxes and government spending, I don't want to see you belittling and downgrading America's "economic liberalization". Plus how can America reliberalize their tax & government spending policies when the country absorbs 1.1 million unskilled immigrants from backward Third World socialist countries.

Pradeep says:
"Once again, it is not that per capita productivity in India is approaching US levels. You are still freer and thus more productive, per capita. But, roughly speaking, there are 3 of us BRIC people for each one of you Westerners. Unless your productivity remains 3 times ours, forget the privileged position of prosperity you seem to have become so accustomed to. Following recent (albeit partial and modest) economic liberalizations in our countries, our per capita productivity has risen and is rising fast, while yours is stalling and perhaps even reversing course. Are you going to be able to maintain the 3 to 1 productivity ratio? The way the majority of Westerners seem to be thinking these days, Very unlikely!"
I don't expect Indians to ever reach 1/3 the per capita level of productivity of Americans. Indian schools are based on rote-learning whereas American schools are based on problem-solving. Indians have a very high rate of illiteracy whereas illiteracy amongst Caucasian Americans is statistically insignificant. Finally India is a country that has a rigid caste system whereas America had greater economic mobility.

Joshua Norman

Are people here tired of runaway government spending? Would you all like to see the tax, borrow and spending culture of Washington & the state governments changed? What would it be worth to you if someone was willing to identify government spending programs on a line-by-line basis of the federal (and state & local) governments and propose real spending cuts, as opposed to cuts in the rate of spending increases?

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