Recommended reading – recent economic history and “free trade”

A hat tip to Casey of my prior Drinking Liberally group:

How the Economy Was Lost

There’s a lot in here. I don’t agree with everything, but the basic thrust is right.

I have two points:

  • He puts “free trade” in quotes throughout the piece. But he doesn’t seem to spell out how, by his use of the scare quotes, we’ve actually had “protectionist” measures during the conservative economic revolution. I think that the conservatives have generally pushed toward freer trade in goods and services (while protecting certain industries, like agriculture). That’s led to more of a global labor market, putting American workers in competition with low-wage countries. And of course, we’ve had freer financial markets, with money sloshing all around the globe causing long-run havoc just about everywhere where it goes. More globalized goods and services markets, labor markets, and financial markets – that’s “free trade” in a nutshell. In other words, we’re getting exactly what the “free traders” promised.
  • There’s the implication throughout the piece that we have to start manufacturing again in the U.S. It’s true that manufacturing jobs have gone away in large numbers, especially here in the Midwest, but the U.S. still remains a large manufacturer by one measure. So, what’s our goal here? Just more manufacturing jobs? I’ve always wondered: are manufacturing jobs so highly valued because they’re great jobs to have or because they pay great wages? Is it really that great to work in a plant? (I’ve never worked in one.) If the real object is jobs and wages, let’s focus on those, instead of manufacturing itself. (As he points out, though, the value of the dollar will have a bigger impact on the future of manufacturing in the U.S. than our desire to see more manufacturing.)

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