The "new normal" world we are now told we live in by the neoliberal free trade zombies

[portlander23]

What the Price of Your Sneakers Really Says About Free Trade
Jud Lounsbury
The Progressive

In the wake of Brexit, former IMF Chief Economist Kenneth Rogoff blasted free trade critics:

"The popular response looks at jobs, but would they like to pay twice as much for a car? Would they like to have a phone that they pay 100 dollars, cost 500? Would they like to buy things in Wal-Mart that are now three dollars for nine dollars? You don't see all the millions and millions of consumers that are behind this. We get an enormous benefit from trade. Our real standard of living will diminish sharply if we close our borders to say exports from China."

Putting aside the indirect costs associated with "no holds barred" free trade, such as child labor or toxic pollution that finds its way back to us, as well as, you know, losing your job and not being able to afford much of anything, the actual low-price claims are dubious as well.

What has happened in the U.S. is that the number of new cars being sold, per capita, has dwindled. This is in part because many of the American car-making jobs have been eliminated due to outsourcing made easier by free trade deals. The number of people who can afford to buy a new car is not what it once was.

The Henry Ford maxim that you won't sell as many cars if there aren't as many people making a decent wage is proving true.

And phones? Does Rogoff really believe that a phone couldn't be made in the United States for a low-end price point of $100? Considering Apple, the corporation that enjoys the world's largest profit margin, spends only $4.50 for the assembly of the latest $749 iPhone, it's easy to see that cheap overseas labor doesn't have much to do with setting consumer prices.

Obviously there are many sectors where corporations, in order to stay in business, are forced to outsource to a cheaper labor force to keep up with competitors, but this is nowhere near the "new normal" world we are now repeatedly told we live in by the neoliberal free trade zombies.

[MisterP]

1. since when are cheaper costs immediately passed on to the consumer? is Rogoff a 7-year-old?

[Locrian]

2. zombies

Market sets the price which they try to make as high as possible for PROFIT.
Labor / resource sets the PROFIT.


They will charge as high of a price and try to make it the cheapest possible for PROFIT. They can only set the price so high before people won't but it.

[passiveporcupine]

3. Well, now you hit a sore point with me

You being Rogoff, not the OP

Would they like to buy things in Wal-Mart that are now three dollars for nine dollars?

Would I rather pay $9 or $3 for an item from Walmart?

I'd rather pay $20 if it meant it was actually made to last. Most things you can buy at Walmart today, unless they are consumables, are total trash. And their 'savings' brands, Great Value, consumable products, are trash too...food or not, I won't buy them any more. They are disgusting quality.

I'm tired of taking things back that don't even last the 30 to 90 day return policy. I won't shop there for anything except name brand consumables any more because of crappy quality. I still have to get my prescriptions there, and I buy other bulk consumable items like toilet paper and dish soap, etc. only for the savings. But food, clothing, household supplies and tools and linens (especially linens and clothing)...nope...not from WalMart.

And it's not just Walmart. I'm finding Ace Hardware also carries a lot of crap items now. Very limited shopping in my small town, because Walmart drove out much of the competition except high end tourist shops that I usually can't afford to shop at. But if I really need something, I'll pay more at a high end shop first. I just do without a lot and avoid shopping as much as I can.

Nope...cheap prices often end up costing you more in the long run for items made for planned obsolescence. It also is driving the reduction in wages in the US and unfortunately that does not apply to homes, automobiles, and health care. So people are getting poorer and unable to afford some very necessary items, while pacifying themselves with shopping for crap that won't last.

Not to mention the damage we are dong to countries we ship our trash off to, to be picked through for recyclable metals, by children, unaware of the hazards, because they are hungry.

[Urchin]

5. I'd rather

have a reliable job for fair compensation that doesn't work you to death, and feel reasonably secure that I can afford and continue to afford those basic things necessary to keep breathing: like affordable healthy food, an affordable and decent home, affordable quality health care, affordable education, and affordable transportation and energy (our current low energy prices are an anomaly that won't last).

And while I'm at it, why are hardbound books so damn expensive? They don't even have full cloth covers anymore.

[Urchin]

4. Phones and cars might cost more?

Phones and cars might cost more but it's OK that young people can no longer afford to buy their own homes and it's OK for young people to have only minimum wage service jobs waiting for them after graduation, along with huge student debts they'll never be able to pay. And it's OK if people can no longer afford healthcare or healthy food, the cost of all these have gone through the roof.

And anyone who's aware what's going on and who has a job, needs to worry every morning whether they'll be out of work the next day and unable to find a job again.

But hey, we can buy cheap smartphones.

[Urchin]

6. Funny thing is

Maybe a thing that cost $3 now might cost $9 without free trade--

But if "free" trade had never happened, someone who makes $30K a year now, might instead be making $90K a year.

And might also be a lot more secure in their career.

[applegrove]

7. We are now service economies in the west. And robots are

doing the manufacturing. We need trade. But Liberal trade where the worst of capitalism is mitigated by regulations instead of neoliberals trade and it's bubbles and crashes.