14.8.12

GLOBALIZATION IS GOOD.

Sometimes, one finds insights in unusual places.  Common Dreams is a place to go for information on the latest protest against the international plutocracy.  On the other hand, here is Dean Baker of the Center for Economic and Policy Research, explaining in the course of a commentary on the record of Republican vice-presidential hopeful Paul Ryan that trade barriers restrict output in order to enrich some people and impoverish others.
[Rep. Ryan] has also never spoken up against the professional and licensing restrictions that protect doctors in the United States from international competition. As a result of these protectionist barriers we pay our doctors more than twice as much as what doctors earn in Western Europe. If free trade lowered doctors pay to Western European levels it would be equivalent to a tax cut of $1,200 a year for an average family of four.
The gravamen of Mr Baker's column is that the representative is not as libertarian in the matter of corporate welfare as some of the Republican coalition would hope.

The generalizations from physicians' pay to steelworkers' pay, or auto workers' pay, or retail clerks' pay, are left to the reader as an exercise.  Extra credit for working out the general equilibrium implications.  This is an open-book test, and Paul Krugman's Pop Internationalism is a good place to start your research.

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