Saturday, October 20, 2012

These clowns again?

Imagine if NPR and PBS gave softball interviews to Michael Behe to allow him to promote his latest intelligent design book.

That's what it felt like a few months ago when I tuned in to NPR giving investigative journalists and authors Donald L. Barlett and James B. Steele airtime to promote their protectionist book The Betrayal of the American Dream, where they got in over their head and made policy recommendations along the lines of the Smoot-Hawley Tariff Act of 1930.

That interview lacked a response from a free trade supporters and the listener was never informed that Barlett and Steele are rejecting a firm scientific consensus that goes back several hundred years.

Now I see that PBS has given them another chance to promote their book. This time they brought in Harvard economist Robert Lawrence to respond to some of their claims, although I feel he could have done a much better job.

Lawrence made a great case that mechanization has replaced manufacturing jobs the same way it replaced agricultural jobs. Unfortunately, he completely let Barlett get away with saying:

The problem is, when the theory [of free trade] was developed back in the early 1800s, it was envisioned as countries operating comparably. The incomes of the United States and China are so disparate that it would never work. It's always going to be cheaper to go over to China to build what you want to build.

It's our old friend the pauper labor fallacy, where economic illiterates assume production costs are determined entirely by labor prices. They ignore that capital investments, like labor-saving machines, can dramatically increase productivity. In short, it's the cost per unit, not merely the cost of the labor, that matters.

Lawrence also made a pop internationalist argument, where he spoke of free trade as if the benefit is merely in exports:

We need to get tough in opening foreign markets and signing trade agreements that increase our exports. But if we start to discriminate against foreigners with tariffs, they will do the same to us, and what we will end up in is a giant trade war, in which we will all be losers.

I'm a little embarrassed for everyone involved. The point of free trade is not to ship the hard work of American workers overseas to benefit foreigners. It is to bring imports to American consumers as cheaply as possible.

We don't have to wait for revenge tariffs from other nations to harm America. The tariffs our government passes directly harms the American public by raising the prices people must pay. This idea that the danger of tariffs is that they may cause trade is foolish when spoken by a member of the general public. To hear it from an Ivy League academic economist is heartbreaking.

Barlett and Steele must have done some good work in the 1970's and 1980's when they won two Pulitzers together for their work in federal taxes. Today, they've become cranks living on an outdated reputation. Shame on public broadcasting for promoting their nonsense.

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