Richard Benson is president of Specialty Finance Group, LLC , offering diversified investment banking services.
I would be the first to champion the benefits of Free Trade based on legitimate Comparative Advantage. As a graduate student at Harvard, I had the privilege to pass on Wisdom of the Ages and Sages to the bright undergraduate youth. David Ricardo had a beautiful idea and classic cases of his vision of Comparative Advantage were carefully used in every economic text, such as: Country A has lush farm land with fertile soil and lots of sun and rain, but is landlocked. Country B has rocky land and a cold climate but happens to be close to some of the richest fishing grounds imagined. Low and behold, Country A has grain and dairy farmers and Country B has fishermen. They trade and everybody is clearly better off! Case closed, QED!".....
.....Finally, the European politicians are in agony and threatening in the press that they will do something about the dollar. With the Euro having tested 1.30 and likely to test 1.40 - 1.50 against the dollar in the future, the European leaders are also facing the full frontal assault of Asia’s factories and 100 million unemployed workers. Europe doesn’t need or want this currency war. America’s trade and budget deficits may be our deficits, but we have made them Europe’s problem! It look’s to me like before the summer is over, Europe will be cutting interest rates and using their new high speed Euro printing press too! If that doesn’t work, I wonder if they will be the ones to go for tariffs on China. After all, Europe has workers who vote, too! ...Link
Thursday, March 04, 2004
Comparative Advantage - Destruction of American Industry?
Here's another author's comments on China/America, markets, currency and humor. Just Think! Labor Arbitrage is Alan Greenspan’s Real Productivity Miracle!