Trade, Jobs, and the Farm Bills

Dani Rodrik led me to this Paper(pdf), and Dani states it is the strongest evidence to date he has found that ‘new products play in shaping the pattern of export composition during the development process’. It does provide that defense, but I believe that the Paper tells Us a little more than just that. Export facility (capital infrastructure) will probably be found to come mainly from the ‘within’ component of traditional exports; therefore, the change in ‘between’ trade expansion past a PPP$14,000 can be accounted in the completion of the capital infrastructure formation in normal economic patterns. The second element of importance is that a concentration of exports occurs around PPP$20000-22000. I believe that it is around this Point that normal economies develop the technology and trained labor to eliminate dependence upon foreign sources in all common-practice industrial sectors--redirecting their Trade commitment. It is my belief Economists perhaps confuse themselves with unimportant issues in the trade development evaluation.

Mark Perry makes a very valid Point, there were far more Jobs generated in other sectors to replace those Jobs lost in the Manufacturing sector since 1997. There was actually about a 14 million increase in Jobs, two-thirds of which actually paid more than the eliminated Manufacturing Jobs. The Rub, though, comes in the form of two Questions: one, did the increase in Jobs keep pace with the increase in the size of the Labor force; and two, did the new Jobs maintain Wage increases to keep even with the Inflation rate? The Answers to those Questions bring a little depression (Could this be called the Little Depression?) where real Personal Purchasing Power has been declining, but hidden by a ballooning of personal debt. Those whose Income is ahead of the curve of Inflation like to claim Times are great, but about 83% of the Labor force cannot enjoy that claim.

I rarely agree with Don Boudreaux, but in this Case I must agree. It is not that I believe that farmers and ranchers should not have some form of federal underwriting; it is only that every version of farm support fueled by lobbying interests is ridiculous. I have long been an advocate of farm subsidies based upon the Cost structure, not on potential Yield capacity. This would insure that no Subsidies would go to Anyone not engaged in Agriculture, such Subsidies would be dependent on actual verified Costs, and perhaps exclude all Payments to any Agricultural enterprise which made more than a 10% Profit. Such a Program could be limited to less than $50 billion in good years, and less than $100 billion in bad years. But what do I know, except that I grew up on a farm. lgl