samedi 19 septembre 2015

The folly of Trump and Sander's protectionism

The anti socialist billionaire and the socialist anti billionaire are on opposite sides in just about every way but they do share the same flawed philosophy when it comes to economic protectionism. Here are a handful or articles on Donald Trump and Bernie Sander's shared ideology.
Here's how Donald Trump could spark a trade war with Mexico and China
Donald Trump and Bernie Sanders: Two Pissed-Off Peas in a Pod
Trump, Sanders spark protectionist revolution
Strout: The Economic Fallacy Behind Trump and Sanders Protectionist Rhetoric
Trump, Sanders and the Summer of the Protectionist New York Grandfathers
Republican's diss Donald Trump on this issue:
Is Donald Trump a 21st-Century Protectionist Herbert Hoover?
Quote:

Free trade is also the greatest antidote to poverty and deprivation in the world’s history. Over the past three decades, according to the World Bank and other sources, the spread of free trade has lowered abject, dollar-a-day poverty by nearly 1 billion people.
Socialists diss Bernie Sanders on this issue:
Is Bernie Sanders a socialist?
Quote:

Bernie Sanders is not an internationalist. He is an American nationalist. He is a consistent advocate of economic nationalism and protectionism
Examples of their rhetoric
Quote:

The results are in, Unfettered free trade has been a disaster for working Americans. It is high time we ended our disastrous trade policies.
--Bernie Sanders
Quote:

I've got a message for corporate America: if you want us to buy your products, you better start producing them here in the United States.
--Bernie Sanders
Quote:

Whether it's China or Japan or Mexico, they're all taking our jobs, and we need jobs in this country. It's enough, what we're doing with foreign trade.
--Donald Trump

Here is quote from the Wikipedia article on protectionism

Quote:

Protectionism is frequently criticized by economists as harming the people it is meant to help. Mainstream economists instead support free trade.[5][14] The principle of comparative advantage shows that the gains from free trade outweigh any losses as free trade creates more jobs than it destroys because it allows countries to specialize in the production of goods and services in which they have a comparative advantage.[15] Protectionism results in deadweight loss; this loss to overall welfare gives no-one any benefit, unlike in a free market, where there is no such total loss. According to economist Stephen P. Magee, the benefits of free trade outweigh the losses by as much as 100 to 1.[16]
My high school history teacher taught us the folly of economic protectionism in the context of various tariff wars. Donald Trump and Bernie Sanders should have been there for that history lesson. There are two major problems with protectionism, the obvious one is economic. With protectionist policies in place, it will cost more human labor, more land and natural resources, more carbon emissions to produce the same good or service (thank you economist David Ricardo) but in addition I believe trade brings peace as well as prosperity. Trump and Sanders both view the world in extreme nonzero terms. Trump talks about winning and thinks in terms of everything as a competition. Who is winning? is it us or China? Sanders views every win and somebody Else's loss especially when it comes to money. The concept of nonzero sum evades them both. Mainstream liberals and conservatives understand this economic reality and our recent Republican and Democratic presidents have advocated for free trade. Now we have two radical extremists who are at the lead of the their respective parties.


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