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Author Topic: Interesting article on Trade... do you agree or not?
Machiavelli
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I normally read the NY Post for it's tabloid articles on gossip, crime etc. and not it's political articles because it's very right winged biased oddly enough. But when I do read some of their political commentary I have to chuckle at the BS they write but once in awhile they do write a article i agree with or mildly agree with.. this is perhaps one of them (since there has been alot of talk among board members that we are losing jobs, middle class etc. due to globalization and trade etc.):

THE TRUTH ON TRADE
IT'S BOOSTING U.S. INCOMES
By DANIEL GRISWOLD
W:

Pushing Congress on free-trade pacts.November 7, 2007 -- PRESIDENT Bush urged Congress yesterday to pass four pending trade agreements, telling a White House audience that open markets boost economic growth, raise standards of living by creating higher-paying jobs and deliver more choice and better prices for consumers. Despite claims to the contrary by populist opponents of trade expansion, the president has the facts and decades of experience on his side.

Critics of trade counter that real wages have stagnated while the middle class has been squeezed by a loss of jobs to low-wage competitors such as China and Mexico. Democrats in Congress point to those anxieties to justify their opposition to any meaningful trade-expanding legislation - including pending free trade accords with South Korea and Colombia and renewal of presidential trade-promotion authority.

Like so many assumptions about trade, the belief that more global competition has somehow lowered the living standards of the average American worker and family is just a myth.

The critics have it all wrong: The middle class isn't disappearing - it's moving up.

The Census reports that the share of U.S. households earning $35,000 to $75,000 a year (in '06 dollars) - roughly, the middle class - has indeed shrunk slightly over the last decade, from 34 percent to 33 percent. But so, too, has the share earning less than $35,000 - from 40 percent to 37 percent.

It's the share of households earning more than $75,000 that's jumped - from 26 percent to 30 percent.

Trade has helped America transform itself into a middle-class service economy. Yes, the country's lost a net 3.3 million manufacturing jobs in the past decade - but it's added a net 11.6 million jobs in service and other sectors where average wages are higher than in manufacturing. Most of these new jobs are in better-paying categories, like professional and business services, finance and education and health services.

Trade and globalization have also helped bolster the balance sheets of American households by delivering higher incomes, lower interest rates and wider investment opportunities. From 1995 to 2004, the real median net worth of U.S. households jumped by 31 percent, boosted by rising home values and stock prices. (Even with the recent housing slump, average home values remain more than 2.5 times what they were a decade ago, according to the S&P/Case-Shiller index.)

Despite frequently heard worries, American families are not "drowning in debt." Yes, total household debt has risen in the past decade - but total assets have risen in value even faster.

On average, U.S. households spent 14.4 percent of their income on debt payments in 2004, not much different from the 14.1 percent they spent in 1995. The bulk of what we've borrowed hasn't paid for groceries or big-screen TVs but for housing - which, again, has appreciated strongly in the last decade.

Like so many assumptions floating around about trade, the belief that more global competition has somehow lowered the living standards of the average worker and family is just a myth. In fact, trade has delivered lower prices, higher worker compensation and an upwardly mobile middle class.

Critics of trade repeat as a mantra that real wages have been stagnant since the 1970s. But the data on real wages exclude benefits - which have been rising as a share of worker compensation. Those data also rely on a cost-of-living index that has systematically overstated inflation and thus understated real income gains.

The U.S. Bureau of Labor Statistics reports that the average real hourly compensation earned by Americans has actually grown by 22 percent during the past decade - even as trade and other measures of globalization have grown rapidly.

Trade has brought us lower prices on a broad range of goods - from fruits and vegetables to consumer electronics and automobiles - stretching the paychecks of U.S. workers.

Household incomes have also been rising. When they point to a small decline in median household income compared to 2000, opponents of trade are cherry-picking their numbers. That year was the frothy peak of a decade-long expansion. Use 1996 - the comparable point in the previous business cycle - as the baseline, and you see a 6 percent rise in median income.

Convincing Americans that we are worse off than we were in years past has become a popular line of attack against globalization and trade expansion. But trade has played an important part in the positive story of long-term gains in hourly compensation, household income and net wealth.

To promote further progress for U.S. workers and their families, Congress and the administration should work together to pursue policies that expand the freedom of Americans to participate in global markets.

Daniel Griswold directs the Cato Institute's Center for Trade Policy Studies and authored the new study, "Trading Up: How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers," available at freetrade.org.

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Let the world change you... And you can change the world.

Ernesto "Che" Guevara de la Serna

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bdgee
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Agree with a bunch of pig slop already passed through the pig, where everything profitable or nutritious was refined out for use by the pig, leaving nothing that differs in any markable way from horse hockey?

Suuuuuuuuuurrreeee I do.......

And down wind it don't smell, even.

Did I tell ya I seen a pink flying saucer last week end over by the Wilson's big ol' stock tank. Was a pair of blue hued 3 foot tall bug eyed guys got out and strung up a couple of cane pole rigs and I watched 'em catch and eat raw several pounds apiece of bullhead catfish. They chunked the bluegills and bass in the weeds.

You do believe that, don'tcha?

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glassman
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It's the share of households earning more than $75,000 that's jumped - from 26 percent to 30 percent.


this is true, but? when you consider this is two incomes versus one( twenty five years ago) and how much more it costs for two to go to work? it's a net loss....

then consider the more honest comparison of the top 5% (or [Eek!] 1%) to the top 30 percent and the difference is staggering.

do another "real" comparison?

compare mean household income versus avg household income... the numbers are staggering


all economics are relativecomparisons

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Don't envy the happiness of those who live in a fool's paradise.

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IWISHIHAD
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That article is almost humorous.

"The critics have it all wrong: The middle class isn't disappearing - it's moving up."

Like they say the middle class is the working poor.

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glassman
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Those data also rely on a cost-of-living index that has systematically overstated inflation and thus understated real income gains.

this is a flat out lie.

infaltion numbers represented by the FED have no bearing on what the average household pays since they take the cost of food and gasoline out before tehy begin to calculate it.

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Don't envy the happiness of those who live in a fool's paradise.

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bdgee
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It's voo-doo economics, just like it was when Reagan lied about it.
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cottonjim
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Same story different decade. Don't kid yourself, it will/would be the same story no matter who was behind the wheel. SO now is 75K per houshold considered "upper class" or "upper middle class"?

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If ignorance is bliss, why aren't more people happy?

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glassman
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100K would be my definition of minimum upper middle.


look at last years median home price? 225K$

theoretically? you should be making 4500$ per month to realistically qualify on a 100% 30 yr 6% loan...

that's 54K year (before payroll deductions), and that doesn't include mortgage insurance premiums (required for 100% financing)or taxes or homeowners insurance (another 100 month avg)....

to be comfortable you should be making 54K per year AFTER taxes...

add 700/month for ( 2 cheap) car payments? 200 month min. for car insurance? ......
get my drift?

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Don't envy the happiness of those who live in a fool's paradise.

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IWISHIHAD
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Glassman, your point is the bottom line to this joke of and article.

People do make more money now but seem to have less to spend because of all the rising costs.

It really is a shame that i look back at the 1960's and think how much better off families were in general making so much less money. It was easier to save money then and have family structure.

I would take a salary of $20,000 in the sixties to $100,000 in the 2007 especially if i had to live in the major urban areas with a family and commute. Of course i would have taken $100,000 in the sixties and really enjoyed myself.

They state in this article that we have lost manufactuing jobs but have gained service jobs. If we stopped imports wouldn't we have both?

I did not know that service jobs were all that high paying for many or most. Again that upper .5% averages the rest.

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glassman
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the difference in incomes between the top 1% and the median has never been higher .. since the depression that is...

in the past some people have argued that the wealth of the rich trickles down...

that was true until the trade deficit became so huge...
now it trickles out...

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Don't envy the happiness of those who live in a fool's paradise.

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