STOCK MARKET WATCH -- Tuesday, 10 April 2012

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56. Trade Agreements Produce Winners and Losers, and the Losers Aren't Very Happy About It

http://motherjones.com/kevin-drum/2012/04/trade-agreements-produce-winners-and-losers-and-losers-arent-very-happy-about-it

Adam Ozimek lists a few things today that economists agree about almost unanimously, and I don't have a problem with most of them. But I do find this one a bit blinkered:

The benefits of free trade and NAFTA far outweigh the costs

Economists have emphasized the benefits of free trade for a long time, reflecting the field's belief in the importance of specialization, comparative advantage, and gains from trade. Indeed, these results are similar to other surveys that show economists strongly supporting free trade.

So why do pundits and voters lag economists in supporting free trade? In his excellent book The Myth of the Rational Voter, Bryan Caplan provides evidence that people suffer from a handful of systematic biases that influence their beliefs, and three of these can help explain why voters are skeptical of trade: anti-market bias, anti-foreign bias, and pessimism bias.

....As is reflected in the comments by some of the panelists trade will create winners and losers, which may also explain some opposition to trade. But economists on the left and the right still struggle the understand the level of opposition to trade....

OK, hold it right there. How much more do you need to know? Free trade may be good on an aggregate basis, but it does indeed create winners and losers. And I think economists pretty universally agree that workers without college degrees are always net losers from expanded trade. Given that two-thirds of Americans don't have college degrees, and that promises to help workers displaced by trade agreements are generally worthless, why is it any surprise that most Americans aren't very keen on trade agreements?



*** we've all become First Nations people in our agreements with the government.