Friday, November 12, 2010

Wouldn't It Be Nice?

Wouldn't it be nice if we had a president who understood at least a little economics?  We don't now, but we can always hope for the future.

Read here about how BHO has failed to reach agreements with the president of South Korea about how America and South Korea could trade.  What's to agree on?  All you have to do is let people voluntarily do what people want to do voluntarily.  The power of voluntary exchange to bring prosperity and harmony to people is really quite remarkable.  I wish BHO and crew understood that very simple principle, but it just isn't the case.

One can easily guess the kinds of  trade "deals" BHO was auguring for.  We get this, you get that, and mostly the folks at home get screwed, except of course, the folks who have given BHO money to get elected in the first place.  Sadly, that's the extent of deliberations between the presidents of nations when it comes to international trade.

Milton Friedman probably said it long ago, since he said so many things about economics that were absolutely brilliant.  Never mind if some other country wants to impose trade restrictions of some kind.  Trade with them freely anyway, as businesses voluntarily decide to do, just the same.  Why?  Because it will make everyone involved better off.

In other words, there is no such thing as a voluntary exchange that doesn't produce value for both parties to the exchange.  This principle really isn't hard to understand.  If two parties --- be they individual persons or companies --- voluntarily agree to trade, it must be that each will be better off.   If that were not the case, they wouldn't agree to the exchange voluntarily.  Uh, duh.

Of course, if you are a president of a country, and if some particular fat cats in some particular industry gave you lots of money to get elected, then you are obliged to try to get unusually good terms of trade for the fat cats in that industry --- even if it hurts everyone else but the fat cats in that particular industry.   Never mind the millions of ordinary people who aren't part of that particular industry who would otherwise benefit from open and free trade.  All this has been well understood for decades by modestly intelligent people.

The economics of free trade among people and businesses around the globe is completely and utterly well known to every economist on the globe.  But never mind that a vast majority of economists agree that unfettered free trade produces prosperity for all involved.  Politicians still want to play the "trade game."

What's the trade game?  That's the game where politicians of one country --- say America --- attempt to restrict imports of  certain goods and services --- say Korean manufactured cars --- and at the same time try to enhance possibilities of exporting certain other goods and services --- say beef --- to buyers in another country --- say Korea.  Morons.  Just let people and businesses decide what they want to trade.  Get BHO and crew out of it.

Oh, by the way; I think the American people are getting about the business of getting BHO and crew out of it.  Can't wait for 2012 elections.

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