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October 15, 2011

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Posted: 15 Oct 2011 12:06 AM PDT

Wanted: Job Creation

Posted: 14 Oct 2011 09:54 AM PDT

I wish I could find a way to adequately express the frustration I feel over the way Congress has all but turned its back on the unemployed. Even now, the only reason we're hearing anything from Democrats about job creation is because there's an election ahead. The legislation is timed for the politicians -- it needs to maximize reelection chances -- minimizing the struggles of the unemployed is a secondary consideration (if that). If the election were further away it's unlikely we'd be hearing about this much at all. And Republicans are worse, they have no plans at all except to use unemployment as an excuse to further ideological goals (balanced budget amendments, tax cuts for the wealthy, etc.). How can politicians be so indifferent to the struggles that the unemployed face daily? Are they really so disconnected from the lives of ordinary people that they don't understand how devastating this is to those who lost jobs due to the recession, people who can't find a way to get hired again no matter how hard they try?

Anyway, I can't seem to find a way to say this with the shrillness it deserves, and I apologize for that, but I just don't understand why the unemployment crisis isn't a national emergency.

Fulfilling Free Trade's Promise

Posted: 14 Oct 2011 08:46 AM PDT

Richard Green:

For free trade to fulfill its promise, the national government must redistribute income: As a card-carrying economist, I like trade--overall, it potentially enriches countries that engage in it. The problem is the meaning of enrichment.
Trade theory says that trade enlarges the pie that people share.  But among the most important contributions to trade theory is the Samuelson-Stolper Theorem, which says that relatively scarce factors of production see their returns fall when trade is introduced. In the context of an economy like the US, this means that low skilled workers see their wages fall in the presence of trade. The trajectory of wages in the US over the past 20 years or so are consistent with the predictions of Samuelson and Stolper.
NAFTA was sold to the US public as something that would make everyone better off. And it principle, it could have done so, had some of the gains to those who benefited from NAFTA been redistributed to those who lost as a result of it. Instead we got the NAFTA but not redistribution. This likely explains the widening disparity of incomes.

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