August 16, 2007 by Tom Armstrong.

This editorial in today’s NY Times advocates a greater role for the state in our economic affairs, such as compensating the losers in globalization. My favorite part of the piece:

If the United States is to reap the rewards of globalization, the government must provide a much more robust safety net — to ensure public support for an open economy and protect vulnerable workers.

Why should the state provide a safety net for those people who lose their jobs to foreign producers? When a worker from Georgia losses his job to a more efficient producer in South Carolina, should he be compensated for working in a less-productive company in Georgia?  These anti-globalization followers never suggest that we compensate the losers of domestic trade. By the logic in the editorial, shouldn’t the workers at the AMC have been provided a safety net for losing the trade battle with Ford and Chevy? So, should we compensate all American workers that work for companies that fail due to domestic trade?

Furthermore, why is compensating the losers of globalization considered a moral imperative to some but these same people never suggest compensating the people that lose their jobs from technological advancement. It’s fine to these people if I lose my job to domestic automation, but not to globalization. Also, how do we know a job is lost from globalization or from technological advancement? We don’t, for the most part.

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August 16, 2007 by Tom Armstrong.

Don B. on trade today:

It’s also worth pointing out that General Motors, Ford, and Chrysler each have huge trade imbalances — to be precise, huge and growing trade deficits — with their workers: these companies buy far more from their workers than their workers buy from them.  Perhaps auto makers should hire workers only on the condition that the trade in each case is “balanced”: each and every worker must agree to spend his or her entire salary on products made by the auto maker.  For example, a G.M. worker whose total compensation in 2007 is $60,000 must spend $60,000 on G.M. products in 2007.  Any worker who fails to do so will be fired because of the resulting imbalance.

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