Karen, Nothing is more long-lived than protected "infant industries". Firms which normally would have gone to be replaced by more efficient companies remain alive to keep the cost of living higher than it need be. This is particularly true of clothing and shoes and similar industries that sell in massive amounts to poorer people. It has been variously estimated that it costs huge amounts - $75,000, $100,000 - to keep one $15,000 clothing job. I have at times suggested it would be cheaper to double the pay packets of the workers, send them home and close the factory.
However, it won't happen, for the huge costs are on the backs of 280 million Americans safely hidden from view. The $15,000 wage is there for everyone to see. An unprotected factory which is not doing a good job will gradually begin to fail until it wakes up and begins again to provide service again. A protected factory is likely to continue to give poor service with tariffs maintaining its ability to remain in business. This can go on for decades. When the protection is removed, the factory's poor performance puts it in jeopardy and its failure to put itself in order is likely to bankrupt it. Now, which is the culprit? The freeing of the system, or the protected environment politicians have provided for it? One of the problems of the left is that they favor protection. Yet, nothing provides more ill-gotten gains (read profits) than protection. So, they complain about exorbitant profits even as they are providing them. Then, of course they play their trump card. Tax the profits. So, the clothing manufacturer pays a tax on the exorbitant profit that depends on his protected ability to raise (say) the price of a tee-shirt by 50 cents. Incidentally, this is a brilliant political stratagem - for taxes are taken from people who don't know they paying it. Some little while ago, I saw a news item. A young man in a Southern town had been caught with several ounces of cocaine. He was wrapped on the knuckles and sent home. This roused tempers, for a short time before a young man had been caught with a small quantity of marijuana and went to jail. It turned out that the marijuana miscreant was the son of the local clothing factory worker, whereas the cocaine crook was the son of the owner of the clothing factory. What caught my eye in the story was that the factory did more than a billion dollars worth of business a year. You can become a big business charging tens of millions of Americans an extra 50 cents for their kids tee-shirts. The French writer Bastiat wrote a small book on "things seen and things unseen". Perhaps futurists should be particularly careful to check below the surface of the obvious. Harry Karen wrote: >Retiring US Sen. Phil Gramm (R-TX) complained that socialist governments >all over the planet were trying to avoid doing this and now the US is >going to, but he voted for it anyway. Ouch. Reality bites. - Karen > >Trade Bill To Help Laid-Off Workers: Victims of Imports Win Added Benefits > > > >EXCERPTs: > >The new benefits emerged as part of a grand bargain between free-traders >and those who argue that free trade should be coupled with greater efforts >to help those it hurts. > >&Like most worker retraining programs, trade adjustment assistance has a >spotty record in moving the unemployed into good jobs. A General >Accounting Office study in 2000 cited Labor Department data indicating >that three-quarters of those who left local training programs in fiscal >1999 found jobs, but found that only 56 percent of those workers earned 80 >percent or more of their previous wages. > >That is why the bill includes the wage-insurance provision, which >compensates laid-off workers for half of their lost wages (with a maximum >of $10,000 over two years) if they take a job paying less than they were >making before. The program applies only to workers over age 50, who are >least likely to gain from retraining. > >"This pays people when they get a new job, and it's at the new job where >they get the best training, not at some artificial training program," said >Litan, who proposed the idea 20 years ago. > >Wage insurance, like the health-insurance tax credit, could easily be made >available more broadly, he said. > >"I originally advocated it just for workers displaced by trade, but as I >talked to people, they persuaded me that if it's such a good idea, it >ought to be expanded to everybody," Litan said. "There's no good or moral >reason to restrict it." > ><http://www.washingtonpost.com/wp-dyn/articles/A38157-2002Aug2.html>http://www.washingtonpost.com/wp-dyn/articles/A38157-2002Aug2.html > > > > > >--- >Incoming mail is certified Virus Free. >Checked by AVG anti-virus system (http://www.grisoft.com). >Version: 6.0.381 / Virus Database: 214 - Release Date: 8/2/2002 ****************************** Harry Pollard Henry George School of LA Box 655 Tujunga CA 91042 [EMAIL PROTECTED] Tel: (818) 352-4141 Fax: (818) 353-2242 *******************************
--- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.381 / Virus Database: 214 - Release Date: 8/2/2002
