quinta-feira, 4 de janeiro de 2007

Bad (Weekly Standard) economics

Yellow Journalism at The Weekly Standard By Robert P. Murphy

"We free marketeers get exhausted saying it so many times, but here goes: Foreign imports do not destroy jobs on net. Government interventions against international trade do not promote employment. Everyone can get hired in a free labor market, so there is no issue of "providing jobs." Further, if the labor market isn't free — and it's certainly not in China — then the best way to promote employment is to get out of the way and allow everyone to be as productive as possible. Manipulating the yuan's exchange rate does no such thing.

Indeed, it seems that Stelzer has it exactly backwards here as well. He seems to think that China's implicit subsidies to its exporters hurt the United States and help China. On the contrary, on average they help Americans and hurt the Chinese.

If this seems shocking, change the scenario ever so slightly. Suppose the Chinese government used its yuan (derived from taxes on its people or slave labor) not to buy US Treasury bills, but instead to directly buy products from Chinese exporters. Then, it decided to send these TVs, radios, etc. as free gifts to US consumers. Would Stelzer claim that this tax-and-spend policy created jobs in China? (Well, maybe he would.) Would Stelzer claim that receiving free TVs makes Americans poorer?"

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