Just had a good Facebook chat with an econ buddy. In the transcript I have given him the pseudonym “Cassandra,” for three reasons:
1. To protect his identity.
2. It’s a girl’s name.
3. It’s a classically appropriate name.
Ne’er spelling nor grammar has been corrected, though I did symbolificate one swear word.
CASSANDRA: i wrote this a moment ago (tell me what you think):
im in favor of free trade….if another company (or an american one on foreign soil) is willing to produce something that our country is unwilling to allocate the resources for (as indicated by the high cost of production) then let them do it and allow our resources to be allocated where the market dictates is most efficient
VDV: what aboot it
CASSANDRA: do you think a) im right? and b) i got my point across?
VDV: Yes* and yes
CASSANDRA: whats with the * ?
VDV: The * is that you used “unwilling to allocate” as synonymous with “having a high cost of production.” That invites a line of attack that we need to summon the will to produce certain goods here.
CASSANDRA: why must we do that?
VDV: Why must we do what?
CASSANDRA: why must we summon the will to produce certain good here?
VDV: Because they’ve always been made here, and by gum that’s what made America strong. The American economy was built on the back of the auto, steel and textile industries, and if we let those industries go, then the American economy will collapse shortly thereafter.
CASSANDRA: thats bull@#$%
VDV: Oh yeah? Then why are we in a recession?
CASSANDRA: because its highly unlikely to always have growing economy or and even one….downturns are virtually inevitable….and we certainly are not in a recession because we have cheap fabrics, cars, and metals available to us from elsewhere…
VDV: The auto industry is crashing and we’re in a recession. QED.
CASSANDRA: i have a cold and we’re in a recession….
VDV: You know what? I’ll bet you drive a foreign car. This is the fault of people like you, looking for a better deal for yourself and not realizing what it’s costing the country.
CASSANDRA: what costs the country is propping up an auto industry that hasnt kept up with the compition….its not enough to produce things here, if we do, we have to produce them better and more efficiently…
VDV: But those other countries stack the deck against us. They won’t let us export our cars to them, which keeps us from getting ticher
VDV: ticher. Or RICHER, for that matter
CASSANDRA: we are freakin americans….we ought to be able to produce a better car, faster, for less, and provide the consumption to get them out of the dealerships and on the road….we dont need other countries…..but if we are unwilling to do so, we should do something else with the resources that we waste in a losing competition
VDV: Oh, we could beat them if we wanted to. Actually, we could beat them if Big Oil wanted us to. They own so many politicians in DC, it’s no wonder America keeps making the big gas guzzlers.
CASSANDRA: “society wants the best” said booker t. washington…..the reason that certain cars clog the interstate is because american consumers want them….and if they can afford them, then the reasons to deny them are pitiful….as for big oil….i suggest that we simply close their doors and make them illegal…..then we have the duel benefit of no gasoline and a further loss of jobs….
VDV: We’d have gasoline. We’d just dril for oil here, like we SHOULD be doing anyways, but it’s been cheaper to get it overseas. Once again, companies trying to save a buck end up costing the whole country.
CASSANDRA: also, i despise the way we want to deny some of our fellow americans the ability to make money because they happen to make more than us….
who would drill for it here?
big oil, thats who.
VDV: OUR Big Oil.
CASSANDRA: big oil is us…..except bp i suppose
VDV: And Chavez’s oil company (Citgo?)
VDV: And by the way, I don’t mind if some people make a lot more than me, but there should be some sort of limit on how much more they make
After all, the minimum wage has helped preserve the economy since FDR. Why not a maximum wage?
CASSANDRA: dom, its disgusting jst knowing that these words flowed from your fingertips…
VDV: This is going on the blog, I’m pretty proud of myself
CASSANDRA: the minimum wage is price floor on labor, the other a price ceiling….aside from the actual moral implications of some deciding for others what they can earn, there are inherent problems when the equilibrium of supply and demand of labor go below the floor or above the cieling
as you well know, jackass
CASSANDRA: the preservation of the economy is not a virtue….if it is preserved, it is not growing….and the rest of the world can be growing and passing us by…
VDV: Well, we’re not preserving it now and look what’s happening
That’s the whole point
CASSANDRA: i hate you.
i can’t even win an argument when im completely right and youre intentionally wrong…
VDV: quiet I’m playing Tecmo Bowl
so,I think Mr V is a closet conservative…. mmhmmm
think conversation is also quite comical
But I do disagree with you;the gvm’t can’t set a maximum wage. Whatever happened to lasseiz faire? or at least, the US’s attempt at lasseix faire. Pretty soon they’ll have set prices and wages for everything, which would lead to the fall or capitalism and then, a gvm’t controlled economy and then communism.
Adam Smith shakes his finger at you.
Your cousin Leslie
I feel compelled to write and correct “cassandra’s” incorrect premise regarding trade. It is not that our country is unwilling to allocate resources for a particular product that makes an imported product cheaper. It is in fact the opposite. We allocate many resources to ensure american products are produced under far stricter labor and environmental standards than are followed in other countries. If we follow the premise that we should allow our resources to be allocated where the market dictates is most “efficient”, then we will literally import everything because we will never be able to compete with companies that pay their workers $1 a week. Ask Cassandra if he eats every day. If so, ask him if he wants every morsel of food he eats to be from China (laced with melamine or antibiotics). Didnt think so. Free trade is not fair trade…never has been and never will be.
I’ve started writing a response to the most recent comment, but it’s getting kind of longish and I want to reserve it for a full post. I’ll say this for now:
Everything I wrote after “Why must we do what?” at 6:49 PM was deliberately wrong. “Cassandra” was right every step of the way, except when he too was being facetious. Longer follow-up post either this weekend or early next week.