There is this.
whoever you think the four most likely Americans to be the next president of the United States—who are probably Ted Cruz, Donald Trump, Bernie Sanders, and Hillary Clinton—none of them are in favor of TPP.
That is a quote from Larry Summers.
Then there is this:
Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize.
That is from David H. Autor, David Dorn, and Gordon H. Hanson.
Politicians, unlike tenured academics, have to cater to what the authors call “exposed workers.”
But note that the last sentence in the quote from Autor, et al. Does it not sound like the PSST story for recessions?
I think of course it does. The AS/AD paradigm (GDP factory) can be a useful abstraction when a large majority of labor is un- or low-skilled: a worker can usually shift to some other field or industry and get a roughly comparable job. Today’s economy specializes a lot more in fields that require extensive training and/or aptitude, so PSST makes it easier to explain modern failure modes. A contributing factor is that technological changes occur much more often, relative to any individual’s working years, than in the past.
“While Cruz said he supports free trade, he believes the Trans-Pacific Partnership would undermine U.S. immigration laws and the nation’s sovereignty.”
Cruz has been publicly pro free trade. Trump, Sanders, and Clinton are not. Is Cruz’s objection to the TPP valid?
So all we have to do is prevent these changes like we do for doctors and lawyers? There have been employment gains but in low productivity areas like food service, not exactly advancement.
Have you ever considered permalinking to a few seminal posts on PSST? Would be a more convenient way to educate new arrivals than the current tag system is (imo anyway).
Yes! It does sound like PSST–aggravated, I think, by massive regulatory interventions by rent-seeking elites and incumbents. The big problem with TPP is that it is not a “free trade” pact at all! Everyone who analyzes its thousands of pages agrees it is a crony-capitalist managed-trade agreement, intended to channel rents and exclude new entrants. Along with domestic regulation, tax policy, and centrally-steered financing, the whole goal of elites is to protect and grow their existing positions and rents even (or especially) at the cost of the economy as a whole– they see “new patterns of specialization and trade” as pure threat, because they control the existing patterns and might not control new ones.
The US regulatory environment is hostile to anything new. The offsetting employment gains are taking place offshore.
Yes it does sound PSST. If the workers stay put, will says law eventually kick in? Is the minimum wage to high? Is PSST just the wait until Say’s law kicks in? Will better Internet communication eventually make PSST less important in these geographical cases?
BTW No one is free trade when they are running but in office they make the deals. Obama was against trade when he was running.