2 thoughts on “Donald Trump’s fairy tale economics would be terrible for America”

  1. Posted 29/07/2015 at 14:47 | Permalink

    “Workers are freed up to work in higher-value occupations”. Thats a good one – in a world in which it is now being recognised that the middle classes are increasingly seeing their jobs being wiped out and finding themselves forced into lower-skill, lower-paying work.

    Perhaps you could provide actual data of what these other, “higher-value” jobs are?

    On outsourcing, you ignore the disaster of such experiments in the US as outsourcing medical secretaries’ work from Chicago, with medical issues that followed, causing human suffering and death, and some whopping big lawsuits.

    And that’s without mentioning that many people detest outsourced call centres because it can complicate whatever business you’re trying to do when you make a call; because it’s damned annoying being treated as an idiot by someone who is clearly on/from the Indian sub-continent introducing themselves as ‘Trevor, or the implications of high-paying (relatively) call centre jobs drawing qualified people away from other, much more highly-skilled and socially useful work in those countries (eg medicine, engineering etc).

    As the experience of Wal-Mart shows (see Charles Fishman’s book on this) the drive to lower prices to the customer reduces quality and sees jobs lost. In areas where Wal-Mart launches a new store, poverty will be increased within five years.

    Trump is an idiot, but this is naive at the very best.

  2. Posted 09/08/2015 at 21:17 | Permalink

    Nice article! This is a great discussion on one of the most fundamental economic concepts: comparative and absolute advantage. We live in a country where the economy is extremely competitive, as people are constantly scrambling on ways to maximize margins on their profits, either by investing heavily on R&D, or by cutting costs by offshoring some activities (moving call centers, manufacturing, production, and handling to the rest of the world). The harsh reality is that as the U.S. progresses, the population in general is becoming much more adept at their job, and value themselves much higher than those who work in the rest of the world (take our minimum wage for example, where people are given as high as $12/hr minimum wage in some states, where in some places in India, people are paid as little as $0.03/hr). The general population is much more educated because of increased competition (attending college is a minimum now, and the internet makes it very easy for anyone to learn), and therefore, are capable of doing much more knowledge intensive work (architects, doctors, engineers, and even skilled laborers). As such, foreign countries have a clear comparative advantage over the united states in simpler laborers. While the U.S. has an absolute advantage arguably in almost all sectors in terms of quality, the time U.S. workers invest can be better spent in innovative fields where anyone with an education can potentially make an impact in. There is no need to bring the call center or manufacturing jobs back to the United States, as businesses are able to reduce costs by offshoring these aspects of their company, and are using the extra margins to either reinvest into the American economy, either by further research or by hiring extra workers to make their efforts more efficient.

    This is a very basic economic concept that Trump doesn’t seem to understand, and may cripple the growth of the American economy, which is arguably the home to some of the move innovative movements, especially in technology (development of clean energy, machine learning, software innovations, and the like), that command trillions of dollars in the U.S. economy. While Trump’s ideas may seem appealing to the general public (who simply want more job opportunities), there are many economic drawbacks to bringing back jobs that other countries have a comparative advantage in.

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