By Arnold Kling
The New York Times has several recent articles on international trade. One piece discusses IBM’s evaluation of outsourcing.
in recent weeks many politicians in Washington, including some in the Bush administration, have begun voicing concerns about the issue during a period when the economy is still weak and the information-technology, or I.T., sector remains mired in a long slump.
In this piece, the U.S. is portrayed as a victim of international trade.
A major reason for the [weak job market] is the mobility of American companies, particularly the ease with which they now shift operations to China and India. “The wholesale movement of jobs and production overseas is handcuffing the recovery,” said Mark M. Zandi, chief economist at Economy.com.
In this piece, the U.S. is portrayed as the villain of international trade.
While nearly one billion people struggle to live on $1 a day, European Union cows net an average of $2 apiece in government subsidies. Japan, a country that prospered like no other by virtue of its ability to gain access to foreign markets for its televisions and cars, retains astronomical rice tariffs. The developed world’s $320 billion in farm subsidies last year dwarfed its $50 billion in development assistance. President Bush’s pledge to increase foreign aid was followed by his signing of a farm bill providing $180 billion in support to American farmers over the next decade.
The freshman economics course would argue that the United States economy benefits from outsourcing and is hurt by farm subsidies. The media reports it the other way around. Is one of the pre-requisites for journalism that you must not understand basic economics?
For Discussion. How would you explain comparative advantage so that a journalist would understand it?