Sunday, October 2, 2016

In Defense Of Ponzi Schemes

This week in the EconoDunce:

"Globalization made most people in the developed world poorer, so now we can't live without cheap imports. But seriously, as long as I have my high paying job, then fuck everyone else. It can't happen to me..."

Free Trade:

"IN MARCH 2000, two months before a crucial vote in America’s Congress on whether to make normal trading relations with China permanent, Bill Clinton...made a bold case for the North Atlantic Free Trade Agreement (NAFTA) with Canada and Mexico, claiming it would create 200,000 jobs in America... in the final year of his second term, he was even more bullish about a trade pact with China, which would allow that country to join the WTO."

“This is a hundred-to-nothing deal for America when it comes to the economic consequences,” said Mr Clinton.

Sixteen years on the mood is rather different.

China’s accession to the WTO was supposed to be a great bonus for America. So why was its impact on trade and jobs so unexpectedly large? One reason was that China got a very significant advantage out of the pact. 

It is unlikely that men are dropping out of work voluntarily. More than a third of inactive men live in poverty; less than a quarter have a working spouse. So the most obvious explanation is a fall in demand for less-skilled men.