The economy added 916,000 jobs in March, above the Bloomberg consensus of 647,000.
Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus as of 4/1 for March nonfarm payroll employment (light blue square), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (3/1/2021 release), NBER, and author’s calculations.
On the strength of the labor market, see Baum and Klein at EconoFact.
‘Before everyone goes bananas about the good job report for March 2021, the employment to population ratio for the 25-54 may have increased from 76.5% to 76.8%, it was 80.5% in January 2020. Still a long ways to go.’
Part of what I wrote earlier. The rest was my noting of the obvious – Senator Turtle is two faced on fiscal policy.
It appears to be a bit of a makeup from the Nov.-Dec. 2020 state lockdowns.
https://data.bls.gov/generated_files/graphics/latest_numbers_CES0000000001_2011_2021_all_period_M03_data.gif
Several states went “open for business” and even Michigan’s governor refused to re-implement the November lockdown even though cases and hospitalizations are rising rapidly now. Apparently no political capital in doing that now.
https://www.nbcnews.com/news/us-news/covid-cases-spiking-again-michigan-gov-whitmer-making-no-move-n1262408
“Michigan was making good progress at controlling the spread of the coronavirus pandemic and getting people vaccinated this year when, as a public heath expert put it, the state began to “lift the brakes.” Now, the number of Covid-19 cases is spiking and hospitalization rates have been rising, and on Sunday the state reported that its pandemic testing positivity rate had hit 15.64 percent, the highest single-day percentage since Dec. 2. Gov. Gretchen Whitmer has acknowledged that the worsening numbers do not look good.”
What is this? Gloating that people followed your incessant stupid advice? Are you proud of yourself for advocacy BS that is still killing Americans at a rapid race? Yes – I would not put it past a clown like Bruce Hall to be dancing on the graves of old people who died from this virus.
No, pgl. Not gloating about anything. Simply pointing out that the “surge” in employment numbers may be related to the “depression” of employment numbers from actions taken previously.
You tend to read into things way too much. Or maybe you suffer from a dissociative disorder. Perhaps you should have yourself checked out.
But, regardless, thanks for never failing to come up with an irrelevant ad hominem.
You have been advocating people not social distance or wear masks from day one. Come on weasel – man up for your advocacy. Even if it was stupid as eff and heartless as it gets.
But I do hope your mommy is buying your meals as well as your daily doses of bleach.
As I die hard fan of the Atlanta Braves I cannot put in words how angry I am that my home town will not host the All Star game:
https://www.espn.com/mlb/story/_/id/31183822/mlb-moving-all-star-game-atlanta-georgia-voting-law
Now I do not blame MLB. I do blame Governor Brian Kemp who is in office simply because he cheated in the 2018 election. This lying sack of manure is still lying. Can the citizens of Georgia impeach this disaster? Or will they allow Brian Kemp to go relieve himself on the graves of Henry Aaron, John Lewis, and MLK?
pgl, in concert with MLB’s actions to boycott Atlanta, perhaps the nation should boycott Coca-Cola, Home Depot, Delta Airlines, UPS, and other corporations headquartered in Georgia. Sure, they’re innocent bystanders, but that would teach Kemp a lesson.
Bruce Hall: Edmund Burke.
“The only thing necessary for the triumph of evil is for good men to do nothing.” ― Edmund Burke
MLK echoed similar sentiments. I guess this is why Trumpians hate not only MLK but also Burke.
I’m sure MLB has good intentions.
https://www.azquotes.com/picture-quotes/quote-people-with-good-intentions-but-limited-understanding-are-more-dangerous-than-people-martin-luther-king-142-57-72.jpg
I think we’ve found a new self-assigned nickname for Bruce Baby:
Bruce “Limited Understanding” Hall.
Can I get a seconding or a “Hear!!!! Hear!!!!!” ???
You of all people are quoting MLK? Limited understanding? No the critics of this voter suppression understand the issues in spite of the lies from Brian Kemp. Get over it Bruce – MLK will be supporting this boycott.
Bruce Hall The overall effect of the MLB moving the All-Star game away from Atlanta is zilch. Yes, Atlanta will be worse off, but the gaining city will be correspondingly better off. At the macro level it’s a wash. At the economic level there is no net loss, but on the moral side there’s a clear net gain.
@ Menzie referencing your thoughts related to Edmund Burke
Taken out of Harper’s Magazine April 2021 (lower left, page 16):
“Kill Bills”
Tore up proposals
Unplugged loudspeakers to prevent the passage of bills
Sprayed members of the other party with water
Threw water balloons
Threw food and lunch boxes
Threw paper and trash cans
Threw chairs
Threw pork guts
Engaged in fistfights with members of the other party
Punched and pulled the hair of another legislator, sending her to the hospital
Wrestled other legislators to the floor
Headbutted other legislators
Chewed up a proposal and refused to spit it out
Moses,
I am curious to whom this refers. It certainly is not Burke who lived before loudspeakers were invented.
@ Barkley Rosser
It appears, similar to your failure in understanding a World Bank graph some weeks/months back, you’re just going to have to strain your gray matter you call a brain a little harder. Strenuous, but bear with it. Something tells me Menzie “got it”.
If things get rough, go directly to the Harper’s reference I gave. It can be found in most public libraries, or even per chance the great library on JMU campus.
Moses,
Could not get it by googling.
Sorry, I am not going to go to the public or JMU library to track it down.
Anybody here besides Moses (and maybe Menzie?) have any idea what this is about? I still do not, and this pompously ridiculous remark by Moses did not help.
pgl or Slugbaits? Do either of you know whom this is referencing, if a particular individual? Maye one of you gets Harper’s. Or maybe Steven Kopits knows. I don’t.
OK, Moses, nobody is stepping forward to explain this bizarre comment you have made. I think I would have ignored it if you had not emboldened most of it, with your habit of emboldening all kinds of words in all kinds of posts, most of this emboldening just making you look ridiculous.
Anyway, although I do not definitely know, my guess is that this list is not about actions taken by any particular legislator anywhere, it is a list of things that have occurred in various US legislative bodies carried about by a wide variety of such actors. I do remember seeing mentions of many of these, if not all, at one time or another. But I do not remember them, or even that many of them, being carried out by any particular individual. So I guess this is supposed to show how awful US legislators have been compared to the semi-saintly Burke.
Oh, given how this sub-thread started, maybe just maybe all these things happened in the Georgia legislature. That would sort of make this comment by you having some sort of relevance here. But I kind of doubt this is the case. I think the perpetrators of all this came from a broader set of legislative bodies. But I stand to be corrected if indeed this all happened in the Georgia legislature, heck, maybe all done by a single Georgia legislator who led the charge on these new voting laws. Then it would be super relevant and highly witty. As it is, it just looks like a lot of silly shouting, which is what any emboldened word posted here comes across as: shouting.
Got it, Moses?
It turns out that these businesses have turned on Gov. Kemp. I guess this is why you want to boycott them – not being racist enough for you.
“Georgia House Passes Bill stripping Delta of a Multi million Tax Break After It Slammed State’s New Voting Restrictions” Forbes
“Georgia House Votes to Strip Delta of Big Tax Break…” CBS News
You can’t get much friendlier with your state’s biggest private employer (33,000 employees) than that, right Bruce? And there have been reports of more than one Republican legislator switching to Pepsi, which would be another shining moment in those railing against “cancel culture” and praising freedom of speech.
BTW, Bruce. If you’re really gullible enough to believe Georgia passed those laws to expand voting and election integrity, you need to contact me immediately for a swell business opportunity. I have ocean front property located between Bakersfield and Fresno–adjacent to Hwy 99– for a reduced cash price
Perfect for savvy investors looking for a prime RE bargain. Let me know. It won’t last long.
This is indeed good news. But what about progress among minorities and low income whites who were most affected?
And whither wages? After 40+ years of stagnant wages and malign neglect, are elite politicians and opinion influencers ready to stop trumpeting policies that hurt wage growth and to start advocating for sharing more of productivity gains with labor?
[I can’t help thinking about Krugman cheering for China PNTR, even going so far as to make the outrageous claim that the deal would be good for union members!!!]
This garbage about what Krugman said even though he never did is insulting to everyone who reads this blog. Try providing a link such as this one:
https://www.princeton.edu/~pkrugman/pk-bpea-draft.pdf
Read just the first two paragraphs as you will see what he really has said which is just the opposite of the pathetic lie you insist on repeating over and over.
This is indeed good news!!! But what is the impact on those most affected—minorities and low income workers?
And whither wages? After 40+ years of stagnation, are politicians and elite influencers ready to promote the idea that productivity gains should be shared more withlabor?And what about reigning in the relentless pursuit of policies that adversely affect jobs and wages?
[I can’t help thinking here of Krugman who, in his ringing endorsement of China PNTR, made the outrageous claim that union members would be better off under the deal!!!]
No link? Sorry dude but without a link – this is nothing more than you lying about what some one alleged said.
I’ve provided this link to pgl probably half a dozen times…but some things apparently just don’t sink in.
“ For labor, blocking P.N.T.R. would be a demonstration of clout — even though the trade arithmetic suggests that union members as a group would if anything benefit from China’s offered concessions.”
https://www.nytimes.com/2000/05/10/opinion/reckonings-a-symbol-issue.html
Now pgl will probably dream up something else in a lame attempt to exonerate Krugman’s egregiously bad assertion.
I guess JohnH cannot read after all. Start with “benefit from China’s offered concessions” and then read the date of this oped (2000). Now I know this is too hard for someone as lazy and stupid as you clearly are but read his 2008 discussions. He noted that free trade would lower real wages for certain workers. It is true the literature back in the 1990’s did not anticipate the China shock which is what he thorough review in 2008 addressed.
Come on man – cherry picking and misrepresenting what Krugman has said is indeed your game. But of course actually understanding economics has never been your interest.
Krugman’s 2008 piece was largely irrelevant, because the China PNTR horse was already out of the barn along with millions of jobs, the carnage aided and abetted by Krugman. 20-20 hindsight? Pul-Eeze!. Some economists like Dean Baker had predicted the consequences but were disparaged and marginalised in favor of boosters like Krugman.
JohnH: Curious, would it have been better to keep China out of WTO, and let it batter through tariffs and quotas unrestrained by any WTO rules. Because the choice was not let China into the WTO vs. *keep China out of the international trading system*. By sheer dint of size (and thinking about Heckscher-Ohlin), China was going to be trading…
Menzie: You are posing an interesting question, one that was probably implicit in the minds of China PNTRs business boosters and was probably not aired publicly a lot, because the displacement of American labor would have become obvious if it had been discussed.
What Krugman was recommending in fact had little to do with economics and a whole lot to do with geopolitics. In essence, the strategists envisioned China becoming a secondary power like Japan, Germany, France of the UK. Since Americans generally don’t like seeing their country as a empire, this was going to be a tough sell. As a result, secondary justifications had to be emphasized, such as the prospects for increased democracy and greater human rights as the shift to economic liberalization supposedly led China to become ‘more Western.’ Dubious economic arguments were also used.
Of course, nothing that Washington hoped for came to pass. China has become a strategic peer competitor, liberal democracy is nowhere on the horizon and benefits for American workers (at least on the input side) have failed to materialize. It was a gigantic policy fiasco that polity makers are still struggling to acknowledge and reckon with.
Now the interesting thing about Heckscher-Ohlin is that it focuses on the factor in abundance, which is ostensibly labor in China. While it was a big part of what made China attractive to business (along with eventual market potential,) many of China’s exports, while requiring labor, turned out to be highly capital intensive required a certain level of skilled labor, not what I imagined China’s strengths to have been 20 years ago. And not exactly consistent with Heckscher-Ohlin, unless the supply of somewhat skilled labor was an important and generally unrecognized factor in China.
But the other thing that China offers, and I think Krugman has written about this, is scale, which was destined to make Chinese production more efficient across numbers of product categories.
So, yes, China most certainly would have eventually emerged as a peer competitor, though probably not nearly as fast as it happened once free access to the enormous North American market was granted along with special provisions protecting Chinese producers. Without PNTR there would have been more time for adjustment, including in labor markets.
And from my standpoint, the American public would not have had to have been subject to all the duplicitous BS about freedom, democracy, improved human rights in China along with imaginary benefits to union members, none of which materialized, or, realistically, could ever have been expected to materialize.
Dean Baker: In a piece titled “Free trade and free taxes; how our intellectuals help the rich Baker states, “Of course, these deals did in fact lower the pay of manufacturing workers, as millions of manufacturing jobs were lost due to trade following the opening to China. In the last decade we have gotten an acknowledgement from many in the economics profession that trade did have a large impact on the manufacturing economy and the regions that depended on these jobs. This was due in large part to the work of M.I.T. labor economist, David Autor and his colleagues.”
https://rwer.wordpress.com/2021/04/02/free-trade-and-free-taxes-how-our-intellectuals-help-the-rich/
Baker goes on to talk about Tom Friedman, who was asked, ‘Mr. Friedman, is there any free trade agreement you’d oppose?’ [He] said, ‘No, absolutely not. You know what, sir? I wrote a column supporting the CAFTA, the Caribbean Free Trade initiative. I didn’t even know what was in it. I just knew two words: free trade.’” Unfortunately, that seemed to be the stance of the vast majority of economists who were doubling as public intellectuals at the time.
Tom Friedman is not an economist. No he may be as stupid as you are. OK, Dean Baker and David Autor have contributed to this literature often saying the same thing as Krugman has said. Of course all three of them know what Stopler-Samuelson is all about. Do you? Of course not because you are know nothing loud mouth.
As I said, many economists doubling as public intellectuals had the same attitude as Friedman…but pgl is trying to rewrite history, just as he did trying to erase Obamausterity.
Stiglitz: “The selling—or overselling—of free trade…was hard to explain, so politicians told another story often supported by economists,”
https://www8.gsb.columbia.edu/faculty/jstiglitz/sites/jstiglitz/files/The%20Overselling%20of%20Globalization.pdf
Krugman, by asserting imaginary benefits to union members, was overselling if not misleading.
Question is, have prominent economists doubling as public intellectuals, finally decided to stop supporting job destroying policies that mostly benefit corporations and their wealthy investors?
“JohnH
April 4, 2021 at 4:40 pm
Krugman’s 2008 piece was largely irrelevant”
Leave it to economic know nothing JohnH to call actual economics irrelevant as he highlights some ramblings from Thomas “no relationship to Milton” Friedman as the writings of an economist? Can there be a better example of how uninformed this troll really is? Damn!
https://cepr.net/jobs-2021-04/
April 2, 2021
Economy Adds 916,000 Jobs in March; Unemployment Falls to 6.0 Percent
By DEAN BAKER
The strong productivity growth from last year seems to be continuing
The March employment reports show the economy bouncing back sharply due to the spread of vaccines and the first effects of the Biden recovery package. The establishment survey showed the economy adding 916,000 jobs in the month. The household survey was also encouraging, with the unemployment rate dropping 0.2 percentage points to 6.0 percent, a level not reached in the recovery from the Great Recession until September of 2014. The employment-to-population ratio (EPOP) also edged up 0.2 percentage points to 57.8 percent.
Gains Were Broadly Based
The benefits of the job growth were broadly shared. The unemployment rate for Black workers fell from 9.9 percent to 9.6 percent, while their EPOP rose from 54.2 percent to 54.9 percent, but this is still down 3.8 percentage points from its 2019 average. The EPOP for white workers was 58.1 percent in March, 2.9 percentage points below its 2019 average. The unemployment rate for Hispanic workers fell a 0.6 percentage point to 7.9 percent, while their EPOP rose a 0.5 percentage point to 60.4 percent.
By education group, workers without high school degrees and workers with just high school degrees saw the sharpest drops in unemployment, with their rates falling by 1.9 and 0.5 percentage points, respectively, to 8.2 percent and 6.7 percent. The unemployment rate for college grads fell a 0.1 percentage point to 3.7 percent, while the rate for those with some college was unchanged at 5.9 percent.
Asian Americans were an exception, with a rise in their unemployment rate of 0.9 percent to 6.0 percent, which is 0.6 percentage points above the 5.4 percent rate for whites. It typically is lower. Their EPOP of 59.4 percent is 2.9 percentage points below its 2019 average.
Women Did Slightly Better than Men in March …
Krugman recently was interviewed on our trade policy with China, the recent stimulus, the minimum wage issue, and even the student debt issue. You can listen to this 8 minute interview and hear for yourself what Krugman really said. Or you can read the serial lies from JohnH accusing Krugman of saying things he never said!
https://www.bloomberg.com/news/videos/2021-03-22/pandemic-raised-questions-about-inequality-professor-stevenson-video
I can’t help thinking about ——- cheering…
I can’t help thinking here of ——- who, in his ringing endorsement…
[ Please do set down the precise reference and text when possible.
Thank you. ]
He will not be able to. JohnH has it in for Krugman for some odd reason so when makes claims like these – he is lying.
Ltr — I provided the exact quote and link above. Pgl has seen it many times but conveniently forgets.
A cherry picked out of context quote. Now to quote you:
“many economists doubling as public intellectuals had the same attitude as Friedman”
Let me repeat – Thomas Friedman is not an economist. And Krugman never said free trade with China would increase the real wages of workers. But continue to lie – it is what you do.
Since the first quarter of 2020, the US population has grown by 4.2 million people, to 335 million. There are, however, 7.3 million fewer jobs.
The good news is that we actually have more money to spend. Real disposable personal income per person rose 7.9% – after inflation – from January-February 2020 to the same period this year. However, all of that arose from transfers from the government to households.
Equally discouraging from an economic perspective is that all of that extra income went into savings, and then an extra $119 billion, too. While lower household debt levels have been a priority for many years, the timing couldn’t be worse. Just when businesses need customer in order to keep jobs open, people are spending less and saving more.
We’re not out of the woods yet, folks.
https://fred.stlouisfed.org/graph/?g=tyHz
January 15, 2018
Disposable personal income and personal consumption spending, 2017-2021
(Percent change)
https://fred.stlouisfed.org/graph/?g=CRVh
January 15, 2018
Disposable personal income and personal consumption spending, 2017-2021
(Indexed to 2017)
I will not be buying products made in Georgia until the problem is fixed, regardless of what Coca-Cola’s and other Georgia based companies’ and factories’ public relations statements say. They will know the threat of consumer boycott is real until the laws restricting minority voting are KILLED from both enactment or discussion. PERIOD. FULL STOP
No peanuts for you!
I’m counting on Cali to save me. I’m pretty certain I had some pumpkin seeds from around Fresno way the other day. But give the local government there enough time, I’m sure they can find something immoral to do as well. I’muh small bulk consumer so they’re all sitting in their offices laughing at me anyway.
Georgia governor and serial liar Brian Kemp has a new excuse for that voting law. He finds narrow aspects where NY’s voting rules are more restrictive. OK but as a resident of NY can I say that NY’s voting rules in many ways suck?
I guess Kemp’s next line is that he is less racist than George Wallace was.
A year ago old people are dropping dead from a Virus because of a “President” who said wearing masks during a pandemic did his nation’s citizens no good at all.. Now people are worried the price of gasoline might go up 5 cents. What a difference a year makes. Apparently America’s children are smarter than most adult Republicans:
https://www.youtube.com/watch?v=c6s1K9kppvM
Too bad Jerry Tarkanian consumed too much cholesterol packed food in his life. He’s the only coach who could have saved UCLA from Ganzsalad.
https://www.nytimes.com/2000/05/10/opinion/reckonings-a-symbol-issue.html
May 10, 2000
A Symbol Issue
By Paul Krugman
You could argue that the question whether to grant China ”permanent normal trade relations,” or P.N.T.R., is mainly a procedural issue. The United States won’t be reducing any existing trade barriers; all the concessions in terms of opening markets will come from the Chinese side. Nor will we in any way be dropping our guard against Chinese espionage, abandoning our commitment to the defense of Taiwan, or otherwise pretending that the Chinese government is any better than it is.
But the debate over P.N.T.R. isn’t about the literal content of the measure itself; it’s about the symbolism. For labor, blocking P.N.T.R. would be a demonstration of clout — even though the trade arithmetic suggests that union members as a group would if anything benefit from China’s offered concessions. For those who understandably abhor China’s current rulers, blocking P.N.T.R. would be a slap in the face of undemocratic regimes everywhere — even though nobody really thinks that a rejection would drive those rulers from power.
There is nothing wrong with taking symbolic stands in politics — and China’s government has done nothing to merit kid-glove treatment. The trouble is that whatever symbolism a defeat for P.N.T.R. might have here in the United States, it would have even more powerful symbolism elsewhere — and in a way that would ultimately hurt the very causes the opponents of trade normalization say they hold dear.
The reason I support P.N.T.R. — not with a completely clear conscience, but because the alternatives seem so much worse — is that I remember what the world was like a couple of decades ago. Back then, the tide seemed to be running against everything we stand for; khaki-clad dictators, who ruled their nations’ economies as well as everything else with an iron hand, seemed to be the men of the hour. The idea that by the year 2000 Western ideas — not just the ideology of the free market, but the principle of liberal democracy — would have spread farther than ever before would have seemed implausible. But it happened, largely because governments in the developing world became aware of how well some countries had done by opening themselves to the world market….
Thanks for putting up the oped. Note Krugman never predicted higher US wages despite the dishonest attempt from JohnH to suggest otherwise. This line is important:
‘The United States won’t be reducing any existing trade barriers; all the concessions in terms of opening markets will come from the Chinese side.’
The reduction in trade barriers came later as in the 2004 ending of the Multi-lateral Fibre Agreement which eliminated quotas on apparel from China. Of course our know nothing JohnH does not get the time line of this either.
https://en.wikipedia.org/wiki/Multi_Fibre_Arrangement
The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974 through 1994, imposing quotas on the amount developing countries could export to developed countries. Its successor, the Agreement on Textiles and Clothing (ATC), expired on 1 January 2005.
https://www.nytimes.com/2000/05/10/opinion/reckonings-a-symbol-issue.html
May 10, 2000
A Symbol Issue
By Paul Krugman
You could argue that the question whether to grant China ”permanent normal trade relations,” or P.N.T.R., is mainly a procedural issue. The United States won’t be reducing any existing trade barriers; all the concessions in terms of opening markets will come from the Chinese side. Nor will we in any way be dropping our guard against Chinese espionage, abandoning our commitment to the defense of Taiwan, or otherwise pretending that the Chinese government is any better than it is.
But the debate over P.N.T.R. isn’t about the literal content of the measure itself; it’s about the symbolism. For labor, blocking P.N.T.R. would be a demonstration of clout — even though the trade arithmetic suggests that union members as a group would if anything benefit from China’s offered concessions. For those who understandably abhor China’s current rulers, blocking P.N.T.R. would be a slap in the face of undemocratic regimes everywhere — even though nobody really thinks that a rejection would drive those rulers from power.
There is nothing wrong with taking symbolic stands in politics — and China’s government has done nothing to merit kid-glove treatment. The trouble is that whatever symbolism a defeat for P.N.T.R. might have here in the United States, it would have even more powerful symbolism elsewhere — and in a way that would ultimately hurt the very causes the opponents of trade normalization say they hold dear.
The reason I support P.N.T.R. — not with a completely clear conscience, but because the alternatives seem so much worse — is that I remember what the world was like a couple of decades ago. Back then, the tide seemed to be running against everything we stand for; khaki-clad dictators, who ruled their nations’ economies as well as everything else with an iron hand, seemed to be the men of the hour. The idea that by the year 2000 Western ideas — not just the ideology of the free market, but the principle of liberal democracy — would have spread farther than ever before would have seemed implausible. But it happened, largely because governments in the developing world became aware of how well some countries had done by opening themselves to the world market….
I can find no “cheering” nor “ringing endorsement” from Paul Krugman for turning what had been a yearly renewal of trade relations with China from 1980, to permanent normal trade relations status along with “concessions” or strengthened protections for American “union members as a group” or for production and nonsupervisory workers in particular.
The argument made in this column should be properly described:
https://www.nytimes.com/2000/05/10/opinion/reckonings-a-symbol-issue.html.
Thank you. Alas this will not stop JohnH in his years long parade of attacking Paul Krugman with his dishonest rants. One has to wonder – did Krugman kicked JohnH’s dog or what?
“Now the interesting thing about Heckscher-Ohlin is that it focuses on the factor in abundance, which is ostensibly labor in China.”
From some rambling and often pointless reply to Menzie, JohnH proves once again he has no clue what the Heckscher-Ohlin model is about. Ricardo’s simple model focused on labor. Heckscher-Ohlin introduced capital into international trade theory. But once has to under intermediate microeconomics to grasp what Heckscher-Ohlin is about. JohnH is still struggling with grade school arirthmetic.
Isn’t it odd that JohnH refuses to even read what Krugman wrote in 2008 on the grounds that it was somehow too late but his citations to what Dean Baker wrote was a 2021 discussion and to what Stiglitz wrote was a 2017 presentation. Of course both of these more recent presentations by two first rate economists should be read. In fact a lot of what Stiglitz presented in 2017 echoes what Krugman has written over the years. But we must excuse JohnH for not getting this as his interest is not learning economics but rather finding cherry picked quotes to bash economists.
Here are my thoughts on this rather complicated and certainly controversial matter of China joining the WTO, which has generated a lot of heated discussion here. I suspect my view is closer to that of Menzie’s as stated here briefly, but I do not know. I am not going to comment on Krugman or Baker or Stiglitz or Friedman or any of them.
So the main point Menzie made that I think needs to be recognized is that China was going to become a major player in the world trade system. This had been building up for some time, but by 2000 or so it was reaching a critical mass and was about to become a lot more important, with that importance only getting greater since. Menzie noted in response to JohnH that even if the US were to have blocked China from getting PNTR or joining the WTO, there was going to be a period of disruption for many existing industries in many nations, even if this were delayed somewhat or filtered somewhat by a bunch of tariffs or other trade restrictions on China while refusing to let it get any of these things. The question then arises: what was a reasonable way to respond to this disruption, which was almost inevitably going to happen, unless simply one simply put absolute quotas on Chinese products to simply keep them out (or barely in). Perhaps JohnH thinks that is what should have been done, but short of that, there was going to be some disruption with job losses in some sectors.
What strikes me, especially when people go back to see what this or that person said at the time, is how really I do not think anybody quite realized how disruptive the entry of China into the WTO would prove to be. I note that the scale of the disruption was enhanced by a fairly aggressive policy of keeping the yuan/rmb undervalued during that period (now it is being appreciated), and perhaps the proper response would have been to counter that with policies that would have depreciated the USD. But this was also affecting EU nations and others as well, so this had its limits.
Of course there were some forecasting jobs loss and so on, especially economists associated with US organized labor. But, for better or worse, they lacked credibility at that time because they had cried wolf previously on other trade deals with disaster not happening. The big one was NAFTA, which to this day many in organized labor declare was a disaster for US labor, and JohnH may well agree with that. But, sorry, not so. The benefits forecast by its supporters did not pan out, but the disaster forecast by its opponents also did not pan out. There was some minimal job loss in a few sectors, but on net most studies show NAFTA provided net job gains in the US, although it may have contributed to weakness on wage bargaining power, a point I grant JohnH, although that was happening anyway given the ease of financial capital to move around the world. Despite all the foofaraw, NAFTA was a very minor factor in that.
OTOH, it did indeed turn out that China’s entry into WTO was job destroying and disruptive for several years as the paper by Autor et al has pretty well demonstrated, but most economists did not see that coming. So, given the failed forecasts of disaster from NAFTA and other previous trade agreements, it is not reasonable for somebody ex post to say, “Oh, they should have seen that this trade deal would do it!”
Where I see the policy response in the US really falling down has been how to deal with the impacts of trade distupting industries and leading to unemployment. Sweden and other nations have long had serious job adjustment assistance, with Sweden and Denmatk both paying as much as 21% of GDP on this. But both of them are far more dependent on international trade, so a concern about maintaining competitiveness in a fairly free trade situation was very high across both management and labor. This was not the case in the US.
Indeed, the US has been marked by having either no or very skimply worker adjustment assistance, a joke. And this has been supported by both management and labor. On the management side they simply have not wanted to see money supported on this, which has long translated into a lack of GOP support. On the Dem side, organized labor has generally preferred to push for protectionism to keep out the imports instead, not unreasonably observing how weak and skimy such adjustment assistance had been. So they also did not support it, mostly putting their energy into just pushing protectionism. So we got the self-fulfilling prophecy of weak worker adjustment assistance that justified the stance of organized labor, in contrast to what major Nordic nations did.
“2% of GDP,” not “21%.” Sorry.
Oh, in case JohnH or anybody else wants to support some massive protectionist program, I note that Trump attempted it, and it ended up costing more jobs than it created according to pretty much all studies. Maybe it is possible to carefully craft a plan that would not lose jobs and aid wages, but it is a lot harder to do than those long pushing protectionism as the answer the problems of workers in the US.
“in case JohnH or anybody else wants to support some massive protectionist program, I note that Trump attempted it, and it ended up costing more jobs than it created according to pretty much all studies.”
In fact JohnH did support Trump’s trade war when it started. He will never admit that but then he has even less integrity than Trump does.
The big one was NAFTA, which to this day many in organized labor declare was a disaster for US labor, and JohnH may well agree with that. But, sorry, not so. The benefits forecast by its supporters did not pan out, but the disaster forecast by its opponents also did not pan out. There was some minimal job loss in a few sectors, but on net most studies show NAFTA provided net job gains in the US
I always thought NAFTA was oversold and focused on the wrong thing. To a first approximation free(er) trade pretty much assumes each trading partner is operating at something like full employment. If an economy has a lot of slack, there’s probably not a lot of welfare improvement in opening up trade. Selling NAFTA as some kind of jobs program is misleading. It was also incoherent since unemployment in the mid-1990s was about as low as it was during the Nixon years and on a steady downward trend. The argument for NAFTA should have focused on the welfare gains from free(er) trade and not phony claims about JOBS, JOBS, JOBS.
I’ll also note that the issue with China and the WTO was more about globalization rather than free trade per se.
JOBS, JOBS, JOBS.
You now owe Robert Barro copyright royalties for stealing the title of his 1992 oped where he bashed both President Bush(41) and Bill Clinton for advocating policies to increase employment even though we were not at full employment at the time.
Barro finished this oped by bashing Ross Perot as he saw Perot’s criticism of the NAFTA proposal as stupid.
I guess you never realized you have morphed into Dr. Barro!
“in case JohnH or anybody else wants to support some massive protectionist program, I note that Trump attempted it, and it ended up costing more jobs than it created according to pretty much all studies.”
In fact JohnH did support Trump’s trade war when it started. He will never admit that but then he has even less integrity than Trump does.