Science Guardian

NAFTA has not lost jobs overall

Basic economics remains intact, if unappreciated

As we suspected, all the NAFTA negativity that was being peddled by Clinton and Obama to satisfy the prejudices of the voters in Ohio and Texas flies in the face of the facts on the national level.

As an economist points out in his blog NAFTA has done very well by American labor and the only reason for loss of jobs here is multiplying productivity.

On Carpe Diem Mark Perry of the University of Michigan goes to the Department of Labor stats to show that all the guff about NAFTA, free trade and globalization draining jobs from America is so much hot air.

He points out that NAFTA began 14 years ago and since then jobs have multiplied 14% (plus 24.3 million), unemployment has dropped (from an average 7.1% in the 14 years before NAFTA to 5.1% during NAFTA), and since 1994 business sector wages have accelerated to a gain of 19.3%, compared with 11% from 1979 to 1993.

Bottom Line: By almost all measures, NAFTA has been a success: a) trade among NAFTA nations has tripled and has especially helped U.S. farm exports, b) NAFTA has NOT cost the U.S. jobs, has NOT supressed wages in the U.S. or Mexico and has NOT hurt the U.S. manufacturing base, and c) NAFTA has led to environmental improvements in Mexico.

Bottom Line: Despite all of the political rhetoric about NAFTA, free trade and globalization causing U.S. job losses in manufacturing, one of the most significant factors in the recent decline of American manufacturing jobs is the significant increase in productivity of U.S. workers. Manufacturing output and productivity in the U.S. are both at all-time highs – we’re able to produce more and more output with fewer and fewer workers.

Sadly, it appears that both Clinton and Obama are playing to the gallery with remarks they must know are wrong. No wonder Obama’s Harvard economist told the Canadians not to pay any attention to his electioneering. Just too bad that the Canadians included a tattletale.

A few more correctives via Professor Perry:

The U.S. economy continues to be positively awe-inspiring compared with the competition. The value of U.S. imports in 2006 was roughly the same as the entire GDP of France. The U.S. is the world’s largest exporter; indeed, if all U.S. exporters seceded from the country, they would have the eighth-largest GDP in the world, larger than the entire economy of Canada.

What more do the Democrats want? Under the Bush tax cuts, the top 1% paid 39.4% of federal income taxes in 2005, up from 37.4% in 2000 and 30.3% in 1995, when the Clinton administration was in charge and had pushed a tax hike through a Democratic Congress. (Quote from ibdeditorials.com)

1. January marks the 25th consecutive month of positive growth for real disposable personal income.
2. Although there has certainly been a slowdown in the growth of real disposable income over the last 5 months, it’s not necessarily an indication of recession. Notice in the graph that there was a period in 2002-2003 when real disposable income was growing at below 1% in 6 out of 9 months, and several months in 2005 with negative growth, and neither period was recessionary.

From 1964 to 2008, average hourly earnings have increased at almost the same rate as the Consumer Price Index,

Thus the basic paradigm that free trade is good for us remains intact, even if there is always some painful dislocation of labor for individuals which demands retraining and subsidy from the expanded tax kitty, which is true of any economic progress.

John McCain is no doubt looking forward to putting the knife in to this soft spot in the Democratic line, whoever emerges as the candidate he will oppose.

Why is it that the right wing are always so much better informed that the left on so many issues that deserve decent research before sound bites are formed and fired?

Granted that the touchy feely crowd are allergic to science and economics, but how much effort does it take to call up the Bureau of Labor Statistics and ask a simple question?

How to predict the voting – the Good Ole Boy effect

Of course, given the low level of campaign thinking on the part of the voters in Ohio and Texas the correct data on such high level policy would not doubt be irrelevant anyway.

For example, here on a blog – Immigration Talk with a Mexican American – is a March 2 prediction of the results last night (March 4) which proved correct enough. Look at the real life data it was based on, and weep:

Predicting the March 4, 2008 Winners in TX and Ohio:

My March 4 Predictions:
Texas:
Clinton: 57%
Obama: 43%
Ohio:
1. Clinton: 63%
2. Obama: 37%

Clinton, the Winner in both states.
Why?
I visited my relatives in San Antonio so I had about 10 hours of drive time this weekend. Since I need to stay awake for the drive, I stayed on the AM dial, flipping talk radio stations from city to city.
Let me start with the AM Shock Jocks:
They hate Obama. They are deplorable and they focused primarily on attacks on Obama. Limbaugh, Hannity, Beck, and ALL THE LOCALS, all of them, they ranted and ranted against Barack Huuuuuusssseeeiiinnnne Obama! All the rumors you hear about on the GOP and ANTI websites about Obama… the outfit, the church, the middle name (we should be able to use his middle name, is this America?? where there is smoke there is fire…..) it was ALL OVER THE PLACE! Then they went on and on… blah blah blah as the callers called in and wink wink elbow, elbow, …it is NOT me saying this, it is the CALLER!
I remember one elderly gentleman caller who said, “I don´t care! Anyone who hides his middle name has something to hide!” (wink, wink, terrorist) Then the AM Shock Jock saying, “Callers, let me know if you agree with me and my buddy Bob” as he requested callers to call in.
Nobody, none of these callers listen to Meet the Press or Chris Matthews on MSNBC Hardballin´ Around! These were good ole boys listenen´ to their their Local AMShockJocks as they do, Monday through Saturday, every day when they git up and work their tractors. This is heartland America. This is NOT the “Bradley” effect as occurred in LA. This is the “Good Ole Boy” effect!
I heard a few of them saying, “I am doing as Ann Coulter told us to do. I hate McCain for supporting the illeeeeeeeeeeegals! I am voting for Hillary just to show Dubya that he and the Republicans gotta change their ways!!”
As far as my predictions for Ohio, Ohio has been and will continue to be behind Clinton. They want a return to the prosperity of the 90´s. Who better than Hillary to get us there.
These are my predictions. Let´s see how close to correct I am.
Posted by Dee at 5:17 PM 9 comments

This entry was posted on Wednesday, March 5th, 2008 at 10:52 pm and is filed under Science Guardian. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.