What seems most striking is that the angry working class — dismissed so often as myopic, unable to understand the economic trade-offspresented by trade — appears to have understood what the experts are only belatedly finding to be true: The benefits from trade to the American economy may not always justify its costs.
.. In theory, a developed industrial country like the United States adjusts to import competition by moving workers into more advanced industries that can successfully compete in global markets.
.. In another study they wrote with Daron Acemoglu and Brendan Price from M.I.T., they estimated that rising Chinese imports from 1999 to 2011 cost up to 2.4 million American jobs.
.. the case for globalization based on the fact that it helps expand the economic pie by 3 percent becomes much weaker when it also changes the distribution of the slices by 50 percent, Mr. Autor argued.
.. American manufacturing employment remained fairly stable in the years after Nafta came into force in 1994, plummeting only after China entered the World Trade Organization in 2001 and gained consistent access to markets in the United States.
.. Mr. Autor suggests that Americans’ low savings rate was a big part of the story, coupled with foreigners’ appetite for accumulating dollar assets, which helped keep American interest rates low and the dollar strong, in that way fueling a persistent trade deficit.
.. Germany’s highly skilled workers were harder to replace with cheaper Chinese labor, limiting though not totally eliminating outsourcing. Germany’s stronger labor unions also put up more of a fight.
.. The United States might have leaned against China’s export-led strategy, they argue, perhaps by insisting more forcefully that Beijing let its currency rise as its trade surplus swelled.
.. What Washington did, instead, was hitch the nation’s future to housing and finance.
Nafta May Have Saved Many Autoworkers’ Jobs
But the autoworkers’ animosity is aiming at the wrong target. There are still more than 800,000 jobs in the American auto sector. And there is a good case to be made that without Nafta, there might not be much left of Detroit at all.
.. “Without the ability to move lower-wage jobs to Mexico we would have lost the whole industry,” said Gordon Hanson of the University of California, San Diego, who has been studying the impact of Nafta on industries and workers since its inception more than two decades ago.
.. The industry lost 350,000 jobs, or about a third of its workers, over the period.
..The surge of Mexican exports in the 1990s was propelled by a sharp devaluation of the peso, which set off the so-called Tequila Crisis. The wave of immigration from Mexico into the United States, which lasted until 2005, was driven by a decline in government subsidies to farmers and an economic collapse that occurred just as millions of young Mexicans were entering their late teens and were desperate for jobs.
.. The truth is that autoworkers in Detroit were not just competing with cheap workers in Mexico. They were also competing with American workers in the union-averse South, where many car companies set up shop. They were competing with robots and more efficient Japanese and Korean automakers.
.. The Honda CR-V assembled in El Salto, Jalisco, for example, uses an American-made motor and transmission. Roughly 70 percent of its content is either American or Canadian, according to government statistics.
.. And if the real concern is China — another target of Mr. Trump’s ire — a truly integrated North American market would help keep it at bay.
..“It’s exactly the wrong time to blow up Nafta,” Professor Hanson argued. “We would be doing China an enormous favor.”
The Price of Glee in China
This is Easterlin’s Paradox, the observation that a country in general does not get happier as it becomes richer. This is very controversial, with statisticians analyzing and reanalyzing data and crunching it a bunch of different ways. In the latest volley in this eternal war, Easterlin’s side came out with data from 37 countries over 30 years, including many countries that underwent spectacular growth during that time, and confirmed their original conclusion
.. Here we see a lot of cultural variation in this apparent happiness-income relationship. For example, Latin American countries are consistently poor but happy; Eastern European countries are usually richer but sadder than African countries, et cetera. Looking at the original graph above, you’d expect Chinese growth to make them much happier; looking at this graph, you notice that China’s three rich neighbors – Japan, Taiwan, and South Korea – are all about as happy as China. South Korea, despite making five times more money, is less happy than China is. If China’s income quintuples, why would you expect it to look like France or Ireland rather than South Korea?
.. A UN report theorizes that although richer countries tend to be happier, this is more likely due to factors other than income, like freedom, social trust, and stable families.
.. Let’s assume for a second that all this is true. National income does not matter for national happiness, and if China’s growth continues to skyrocket then in twenty years it will be as rich as Japan but not an iota happier than it is today. What do wedo with this kind of knowledge?
.. Or let me ask a more specific question. Suppose that some free trade pact will increase US unemployment by 1%, but also accelerate the development of some undeveloped foreign country like India into hyper-speed. In twenty years, India’s GDP per capita will go from $1,500/year to $10,000/year. The only cost will be a million or so extra unemployed Americans, plus all that coal that the newly vibrant India is burning probably won’t be very good for the fight against global warming.
Why You Can’t Trust GPS in China
One of the most interesting, if unanticipated, side effects of modern copyright law is the practice by which cartographic companies will introduce a fake street—a road, lane, or throughway that does not, in fact, exist on the ground—into their maps. If that street later shows up on a rival company’s products, then they have all the proof they need for a case of copyright infringement. Known as trap streets, these imaginary roads exist purely as figments of an overactive legal imagination.
.. in China: there, every street, building, and freeway is just slightly off its mark, skewed for reasons of national and economic security.
.. In other words, everything there—roads, nightclubs, clothing stores—appears to be 100-600 meters away from its actual, terrestrial position. The effect of this is that, if you check the GPS coordinates of your friends, as blogger Jon Pasden writes, “you’ll likely see they’re standing in a river or some place 500 meters away even if they’re standing right next to you.”
.. If a given device—such as a smartphone or camera—detects that it is in China, then its ability to geo-tag photos is either temporarily unavailable or strangely compromised.