August 07, 2016
The NYT is inadvertently doing a good job convincing people that the Trans-Pacific Partnership (TPP) is a really bad deal. (I’m picking on the TPP because that is the trade deal currently on the agenda.) The reason that the NYT is making readers believe that the TPP is a really bad deal is that it is obviously lying to push the case for trade — and you don’t have to lie if you have a real case.
The outright lie in this case is its effort to trivialize the job loss due to trade in the United States. Its editorial, titled “the rage for trade,” (okay, I misread it, only the people against trade “rage”) told readers:
“Many economists believe that automation has had a much bigger impact. They point out that other industrialized countries like Germany and Japan have also lost manufacturing jobs even though they, unlike the United States, export more than they import. Between 1990 and 2014, the number of manufacturing jobs fell by 34 percent in Japan, 31 percent in the United States and 25 percent in Germany, according to an April report by the Congressional Research Service.”
See, everyone is losing jobs in manufacturing, only those racist Trump backers would see it as an issue with trade.
Now let’s imagine that the folks at the NYT editorial board are capable of tying their own shoes. Then they would know that the labor force in the United States is growing much more rapidly than the labor force in Japan and Germany. According to the Bureau of Labor Statistics, the U.S. labor force was more than 25 percent larger in 2014 than in 1990. According to data from the OECD, Japan’s labor force was about 3 percent larger in 2014. Germany’s labor force was about 5.0 percent larger.
Other things equal, because of the much more rapid growth in the labor force, we would expect much more rapid growth (or smaller decline) in the number of manufacturing jobs in the United States. The fact we actually lost a larger share of our manufacturing jobs than Germany and almost as large a share as Japan, means that manufacturing fell far more rapidly as a share of total employment in the United States than in these other countries.
Economists who “point out that other industrialized countries like Germany and Japan have also lost manufacturing jobs” understand this basic arithmetic point, as presumably do the editorial writers at the NYT. The only reason to ignore it, and imply that the decline in manufacturing in the three countries has been comparable, and has nothing to do with trade, is to deceive readers.
It is also worth noting that the NYT and “economists who point out that other industrialized countries like Germany and Japan have also lost manufacturing jobs,” are staunch protectionists. They are fine with U.S. laws that prevent foreign doctors from practicing medicine in the United States unless they complete a residency program in the United States. This restriction costs us around $100 billion a year (@ $700 per family per year) in higher medical bills. They are also fine with laws that prevent dentists from practicing in the United States unless they went to dental school here (or recently, in Canada).
These economists are also fine with stronger and longer patent and copyright protection. These government granted monopolies have the same effect on the price of prescription drugs and other protected products as tariffs of 1000 percent or even 10,000 percent. Most economists are fine with these restrictions as well.
Economists and the NYT only like trade when it has the effect of redistributing income upward. They apparently are prepared to lie to promote the trade deals that have this effect.
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