From: curt@ekhadafi.austin.ibm.com (Curt Finch 903 2F021 curt@aixwiz.austin.ibm.com 512-838-2806)
Subject: Re: Protectionism and Japan -fred is a hoser
Date: Tue, 15 Dec 1992 21:17:55 GMT
Distribution: usa,tx
Organization: IBM AWD, Austin

mccall@mksol.dseg.ti.com (fred j mccall 575-3539) writes:

>You need to look at the overall effects on the economy, which simply

The over all effects of protectionism are always very bad, and everyone
who's ever studied economics EXCEPT YOU knows it!

>isn't quite simple enough to say, "Uhg!  Must pay more for steel!  Bad
>Wampum!"  What happens once domestic steel production goes under?

Prove that it will Mr. Fred The FortuneTeller!

>What impacts does that have?  Why isn't the biggest steel user in the
>country out there against this if they're damaged so badly by it?

>So steel users TODAY have to pay higher than world price TODAY for
>steel.  You can't just look at today.


FRED, YOU IGNORANT SLUT.....

Since when did you become so clarivoyent that you could look anywhere
else but today?  Which class was it that you took which made you a
fortune teller?

Your arguments consistently ignore the enormous cost of the protect-
ionist policies you espouse.  Before you endorse some protectionist
backlash, you should at least add up the pricetag for this action,
which is much larger than generally thought, and weigh it against the
potential benefit, (whatever that might possibly be somewhere in the
distant future maybe maybe maybe,) and see if you're getting your
money's worth.  For example:


THE COSTS:

        Protectionism costs jobs (Caterpillar Tractor will have to fire
        people when it's steel prices go up.)

        It costs consumers money (Cars will cost more for you and me.)

        It costs goodwill (The Japanese will be pissed, and even though
        that is your intention, it has a price.)

        It removes opportunity. (Caterpillar Tractor will no longer be
        able to competively export to places that *are not* Japan.  It
        just lost the whole world's market AND the U.S.)

        It distorts the economy. (Caterpillar will start using other
        materials, supporting other industries which may pollute more
        than the steel industry does or have other strange problems.
        Later those industries will go bankrupt when the protectionism
        is eliminated.  And they will fight it.)

        Protectionism snowballs.  (Caterpillar will ask for
        protection too.)


Those are some of the costs of protectionism.  They are ENORMOUS.  Now
what are the benefits?


THE BENEFITS:

        Steel workers get to keep their jobs.  Temporarily for sure,
        maybe (emphasize *maybe*) even permanently.  That's good.

        America might get to keep a certain industry.  That *might* be
        good, who really knows?  And in any case it's only a "maybe."
        It's not a "certainly."  And you have to discount the benefit
        for the *fact* that it is only a probability, not a certainty.

        Japan *might* stop being so protectionist.  Again, this is only
        a maybe.

I submit to you that the COSTS always exceed the BENEFITS by a very
large margin, especially when you discount the BENEFITS by the fact
that they are a probability, not a certainty, whereas many of the costs
are real-today-now-costs which we WILL have to pay TODAY.

Every economist on the planet agrees with this *in theory*.  You have
to make a very very very strong case that this is not so in some
particular small instance to convince me otherwise.

You haven't done so.
You haven't even done the math yet.

Even that goofy quote you're so proud of doesn't support protectionism
in my opinion.  You're just reading it to say what you wish it said
instead of what it really says.

-- 
curt@aixwiz.austin.ibm.com (Curt L. Finch) | AIX NFS/NIS Field Quality 
My views are unrelated to my employer's    |        Austin, TX
 There'll be too many elderly in 30 years for your kids to afford all the FICA.