From: cthorne@magnus.acs.ohio-state.edu (Charles E Thorne)
Subject: Re: Trade War?
Organization: The Ohio State University
Date: Tue, 10 Nov 1992 19:50:14 GMT

In article <BxIKtG.5A1@apollo.hp.com> nelson_p@apollo.hp.com (Peter Nelson) writes:

>In article <1992Nov10.164345.22578@magnus.acs.ohio-state.edu> cthorne@magnus.acs.ohio-state.edu (Charles E Thorne) writes:
>>In article <BxICzy.I5p@apollo.hp.com> nelson_p@apollo.hp.com (Peter Nelson) writes:
>>>In article <1992Nov10.160010.21690@magnus.acs.ohio-state.edu> cthorne@magnus.acs.ohio-state.edu (Charles E Thorne) writes:

>>>>However, I expect we'll see a lot more protectionism in the years ahead.
>>>>With the large U.S. budget deficit, sending military aid to the rest of the
>>>>world and allowing them to send products to the U.S. in competition with
>>>>our producers will become politically undesirable in the years to come.

>>>   How does it follow that this will result in more protectionism?

>>Clinton ran on a ticket of increasing U.S. jobs.  One way to indicate that
>>he's serious about this would be to propose laws that would decrease losing
>>jobs to other countries.  Thus protectionism would increase (he also had
>>serious questions about approving NAFTA).

>   Only if you think protectionism protects jobs.   I don't know how
>   stupid Clinton is, so I won't speculate on what he might do, but
>   considering the hundreds of billions of dollars in goods and
>   services the US exports every year, and the millions of US jobs
>   that depend on this, he would need to have an awfully good 
>   crystal ball to guess whether any particular protectionist act
>   would actually save jobs, or cost jobs due to the effects of
>   foreign retaliation, not to mention the effects on the domestic
>   economy of having to pay more for whatever the product in question
>   was.   Studies of the "voluntary" import quotas on Japanese cars
>   indicated that the cost to the economy for every job saved was
>   far greater than the income generated by that job.

At no point did I indicate that protectionism is a good idea.  The information
I have is that jobs protected by tariffs cost consumers in the neighborhood
of $60-$100,000 per year in increased costs.  That doesn't mean that we
won't see protectionism.  To pay three times as much for clothing to save
a less than $10 per hour textile job doesn't make sense, but that doesn't
mean it won't be done.  I doubt if France's subsidy of it's farmers is a good
idea (nor is ours), but the politics encourages it.  Japan could buy rice for
less than 1/3 as much, if they didn't want to protect their politically
powerful farmers.


>>I would expect that the U.S. forces in Europe would decline substantially
>>(although the Europeans have already complained that we're not doing enough
>>about solving the Serbian-Crotia issue).

>   So let them complain.  I don't see them doing anything.   

>>Unfortunately, reducing military expenditures will also increase unemployment
>>--both in military forces and in defense industries.

>   Right.  We know this.   What does it have to do with the topic at
>   hand?

I expect that the Democrats arguement that all of Clinton's programs can be
paid for with the "savings"in military expenditure are pie in the sky dreaming.

Charlie