Friday, March 07, 2008

Democrats and Trade

A post at The New York Times Blog reminds me of an old post of mine:
What U.S. consumers should (and do) care about is getting the most for their money. If more of their dollars happen to flow across international borders as American companies strive for efficiency, so what? If American companies "send jobs" to Juan in Nuevo Laredo, Mexico, and Pierre in St. Stephen, New Brunswick, Juan and Pierre wil use the extra dollars they earn to buy things of good value to them that are made in the U.S., things that they couldn't afford before. That's called job creation.

In sum, Juan and Pierre outsource to us because we outsource to them, just as you outsource auto repair to your local mechanic and he outsources, say, computer programming to you. And if Juan and Pierre don't spend all of their dollars on consumer goods, they put some of their dollars (directly or indirectly) into U.S. stocks and bonds, which helps to finance economic growth in the U.S.

Outsourcing, which is really the same thing as international trade, creates jobs, creates wealth, and raises real incomes -- for all. Economics is a positive-sum "game."

If you're not convinced, think of it this way: If product X is a good value, does it matter to you whether it was made in Poughkeepsie or Burbank? Well, then, there's nothing wrong with Laredo, Texas, or Calais, Maine, is there?

Now imagine that the Rio Grande River shifts course and, poof, Nuevo Laredo, Mexico, becomes Nuevo Laredo, Texas. Or suppose that the Saint Croix River between Maine and New Brunswick shifts course and the former St. Stephen, New Brunswick, becomes St. Stephen, Maine. Juan and Pierre are now Americans. Feel better?

What's in a border? A border is something to be defended against an enemy. But do you want a border to stand between you and lower prices, more jobs, and economic growth? I thought not.
See also this, this, and this (#17).