The Myth of Free Trade : The Pooring of America

Rating:
Summary: Myth of "Free" Trade now needs a follow-up
Review: Batra has done a fine job of pointing out the problem. Some want more figures, but the key here is the concept of "averaging". For that, I wish Batra had given us a simple example like the one below:

With some 6 Billion People on the planet, 5 Billion earn less than $1,000 per year (say $5 Trillion) - only about 1 Billion earn around $25,000 or more ($25 Trillion) - with 300 Million those in the USA. So, if 6 Billion people "share" the $30 Trillion total World GDP, that means an "average" of $5,000 for each person.

While a peasant in China might be temporarily better off, it would mean the economic end of the USA, Japan and Europe, then total collapse for the West. If China's current goal is to conquer the West, they can do it without a shot fired - just keep exporting while we keep importing and closing factories.

I only hope that Batra writes a follow-up book quite soon and offers up an overview that all of us can internalize. My further hope is that he can present his comments on CSPAN, CNET and CNN before the US election in November.

Rating:
Summary: Myth of "Free" Trade now needs a follow-up
Review: Batra has done a fine job of pointing out the problem. Some want more figures, but the key here is the concept of "averaging". For that, I wish Batra had given us a simple example like the one below:

With some 6 Billion People on the planet, 5 Billion earn less than $1,000 per year (say $5 Trillion) - only about 1 Billion earn around $25,000 or more ($25 Trillion) - with 300 Million those in the USA. So, if 6 Billion people "share" the $30 Trillion total World GDP, that means an "average" of $5,000 for each person.

While a peasant in China might be temporarily better off, it would mean the economic end of the USA, Japan and Europe, then total collapse for the West. If China's current goal is to conquer the West, they can do it without a shot fired - just keep exporting while we keep importing and closing factories.

I only hope that Batra writes a follow-up book quite soon and offers up an overview that all of us can internalize. My further hope is that he can present his comments on CSPAN, CNET and CNN before the US election in November.

Rating:
Summary: the myth of real wages
Review: First let me say that this is a well-written book and does a fairly good job of representing the popular perception that trade can be harmful. Batra gets only two stars from me because of how vague he is on his real wages data. This is an artificial construction that removes skilled labor from calculating wages and then shows a drop in real wages. There is no questioning that a drop in US unskilled labor's wages is happening. This, however, is a meaningless construction because the skilled labor pool is growing, as is its wages. Those are real wages too. The other form of income that Batra ignores is investment income which is available to all Americans who choose to consume less than they earn. Batra knows that the worst consequence of limiting trade is inflation. He tries to present a competition policy that will compensate for the monopolies that a government will create by restricting trade. He presents this as a way to solve the inflation problem, but he ignores the need for greater economies of scale to keep unit costs down. If the coercive power of the state creates artificial competition with firms that are too small to keep costs down, then inflation will still be a problem. It is trade that keeps SKILLED labor's wages rising and trade that keeps inflation at bay.

Rating:
Summary: Well thought out
Review: Well done. It's a shame however that Batra doesn't follow through on this topic in his later books, and gets side-tracked instead by other factors which at best have secondary impact on global economy and ecology. After suffering an entire generation (30 years) of decoupling of per capita productivity and per capita real wage, one wonders how much more stress the US economy can take before it collapses. Then again, what are the limits of human ingenuity and resiliency? Can these factors reverse the damage done by the Free Trade policy? Batra's addressing this factor would have been extremely helpful.