Friday, September 19, 2008

Class materials

My International Economics class is 90% about trade, as most International Econ classes are. Today we're finishing up a discussion on the welfare effects of tariffs, particularly those set by large countries like the U.S.
I'm not allowed to politic in the classroom, which is fine, but I will be showing the following two campaign ads. If these were the only commercials I'd seen from the candidates then my choice would be 110% clear. First, the Obama ad I saw yesterday:


A John McCain web ad that most Americans have never seen, but includes Spanish subtitles:


I would guess that Obama's ad was made by someone who never took an economics class.They never read Travels of a T-Shirt in a Global Economy and are possibly racist against the Chinese, indicating that it's humiliating to work for a firm that is setting up in China.

McCain's speech at the convention was plain: Those jobs are never coming back. He's offered an increased unemployment insurance and temporary job program for those factory workers (though this will do little). But the overall benefits to our economy, and to other countries' economies, are enormous and outweigh the costs of a few workers temporarily unemployed. It's what the data clearly say. If we want allies in the world then we should encourage poor countries' economic development and that will come by lowering our trade barriers. (McCain and conservatives in general do a bad job of explaining this, among other things).

My students are in college because they don't want to work on a farm, or in a factory or a mill. If we eliminated trade with countries like China they would have fewer possibilities and incentives to pursue higher-skilled careers.

2 comments:

myfourwalls said...

what's wrong with working on a farm? there was a NY Times article not to long ago on the trend of young urbanites buying land and starting farms. one of the reasons my wife and i want to move to the world hunger farm and learn sustainable agriculture is that there is something essential to a whole life that we are missing by being so separated from the land and our food.

i know this is miles from the point of your post, but the last paragraph really jumped out at me.

JTapp said...

I didn't say anything was wrong with working on a farm, but many of my students come from agricultural backgrounds (this is rural missouri) and they and their families want to have opportunities to pursue something else.

Agriculture is one of the most heavily-protected aspects of our economy and one way that our government helps impoverish third world farmers. As we reduce tariffs & subsidies many American farms cannot compete and its workers migrate to other sectors (and overall to a higher standard of living over time). By keeping trade barriers we keep resources devoted to farming from moving to other more high-value sectors and limit the choices people have as well as limit the ability for impoverished farmers in places like West Africa to make a profit and improve their lot.

That's why this issue is very critical to look at during an election.