Newsgroups: sci.econ
Subject: Re: NAFTA
From: demon@desire.wright.edu (Stupendous Man)
Date: 18 Aug 92 13:55:50 EST
Reply-To: exit
Organization: Demonic Possesions, Inc.
Summary: NAFTA, good.  Bureaucracy, bad.

In article <51907@dime.cs.umass.edu>, yodaiken@chelm.cs.umass.edu (victor yodaiken) writes:
> In article <Bt1H9E.H9w@undergrad.math.waterloo.edu> sitomlin@undergrad.math.waterloo.edu (Stephen I. Tomlinson) writes:
>><Bsxz2o.6tw@apollo.hp.com> nelson_p@apollo.hp.com (Peter Nelson) writes:
>>>  . . . no one has made a very 
>>>  convincing case one way or the other.  NPR said yesterday 
>>>  that estimates range from gaining 150,000 jobs to losing 
>>>  400,000 jobs.   It is very clear from reading leading economists'
>>>  predictions about the economy in the Wall Street Journal, 
>>>  over the last several years that economics is far, FAR from
>>>  a reliable science.
>>
>>The prospect of losing 400,000 jobs should not greatly concern people (aside
>>from those directly inconvenienced, of course).  Employment in the 
>>U.S. rose from 99.3 million in 1980 to 117.9 million in 1990.  That's 
>>more than 5000 new jobs per day or more than 150,000 new jobs per month.  
>>And that's with the recession of the early 1980's averaged in.
> 
> Right, but what kind of jobs? Everything I've read on this topic suggests
> that the 80's saw a process in which high-wage skilled labor was replaced
> by low-wage unskilled labor: replacing 400K industrial skilled labor
> jobs with 500K burger flipping jobs is a massive net loss to the economy.

	Not true.  During the Reagan years, the number of jobs paying less than
$10/hour decreased 25% while the number of jobs paying more than $10/hour
increased 67%.  [USA Today, Op-ed piece, Monday, August 17th]

...
>>However, while most people would agree that unskilled workers have a higher
>>standard of living than many decades ago, there is considerable 
>>disagreement about whether or not the lot of unskilled workers has 
>>improved over the last decade.  
> 
> But, it is not unskilled workers who are most directly endangered by
> the "free-trade" agreement. No-one is going to move a Burger-King
> from Houston to Juarez, but they might well move a machine shop or
> auto plant. 

	So let's examine the effects of such a move:  In Mexico, people begin
earning more.  They have more disposable income, and can buy more.  Including
the cars they are helping to build.

	In the US, the companies start making bigger profits, due to decreased
wages and increased sales, allowing them to expand production and hire more
people.

	Hmmm.  So what's so bad about that?  That the unskilled laborer in US
auto plants can no longer earn $17/hour?  They've been living in a Potemkin
village since after WWII.  The rest of the world has caught up, and their wages
are going to have to be competative with the rest of the world.

...
>>I've never had much luck convincing you of anything in the past, Peter.
>>But I'm convinced that freer trade is one of the foundations of increasing
>>prosperity, with free markets, sound money, and effective social investments
>>being others.  As for whether or not all Americans share in the increased
>>prosperity, that's going to an ever-increasing challenge for policy-makers
>>with or without freer trade.  NAFTA can help by providing more resources to 
>>work with and perhaps also help by drawing more attention to the issue, 
>>which matters.
> 
> It's not the idea of "free trade" which offends me, it is rather the
> corporatist type of "free-trade" which our masters are imposing on us.
> For example: there is no reason why a free trade agreement should not
> provide for penalties which prohibit any trading partner from gaining an
> unfair advantage via environmental or labor exploitaition.  One could set

	And how could this be determined?  Some addition to the already huge
bureaucracy that would monitor environmental impact?

	Why don't we just mandate that companies are responsible for cleaning
up the messes they create, whether they no longer own the land or not.  That
will force them to include the environmental costs into the costs of
production.  There is no mechanism to achieve this now, except from the
marketing department.

> up a mechanism by which company X could bar imports of products from
> company Y if they could show that company Y was spilling toxic waste or
> had used terror tactics to break a strike. Instead, we have agreements
> which allow US state and local environmental regulations to be overriden
> by international bureaucrats if it can be shown that cheaper products,
> even if produced under dangerous conditions, are being kept from gaining
> market share. This is not a hypothetical problem. GAAT has already attempted
> to squash US bans on importation of dolphin-unsafe tuna, and the US is
> attempting to squash Ontario's environmental fees on aluminum cans 
> (favored by US beer companies). 

	Or Ontarios "warehouse" fees aimed at Stroh's and favoring Molson and
Moosehead?

	Increasing regulations and bureaucracy to emulate the costs of
environmental (or other) concerns is silly.  There is no way a bureaucracy can
achieve anywhere near the efficiency required to successfully accopmlish this
goal.  Have the letters EPA successfully safeguarded the environment?

	As it stands now, the present owner is responsible for cleanup, and not
the polluter.  So what happens is the company pollutes all it wants, sells the
land to a fall-guy who then proceeds to go bankrupt.  Viola, now the banks are 
left holding the bag.

	Clearly what is needed is a law mandating that the original polluter
will always be responsible for cleanup, regardless of who the present owner is.

Brett                                                      
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