Impressed to see that the author doesn't dismiss economic theory outright as some opponents of free trade do. However, many would argue that the TPP is less about free trade and more about securing an American foothold in Southeast Asia to restrict China's influence...

http://economixcomix.com/home/social-security/

interesting take on social welfare aswell.

The TPP one is better...

Is that not a fair description of social welfare? Pay now, get massive income from a Trillion dollar trust fund, receive money back later... seems perfectly legit business plan to me.

Shit! The TPP one just covered my recent econ course in it's entirety in one strip!

I stopped reading it after a bit because what I was reading was mostly wrong.

For one the WTO was not a free trade agreement like this comic claimed.

For two most economists agree NAFTA's benefits outweighed its costs, so the line of weighting for benefits its complete shit.

For three, the foreign debt the US government owns to China has nothing to do with our trade deficit to them.

Fourth, I'm not sure what his argument on currency exchange is. I mean is he arguing the Chinese will stop selling us electronics cause we want to buy them in dollars not Yuan. I'm not going to merit that with a response.

Fifth, I think he's forgetting the fact that China doesn't own the electronics they're selling us. A majority of them a patented in America, with American companies gaining the profits. For example, each iPad purchased in America boosts our trade deficit to the Chinese by $400. However Apples American employees and shareholders both make more money off that sale then those who manufacture the iPad in China.

Sixth, he's trying to turn this into an us vs them argument. China has benefits a lot from trade with America, since 1981 extreme poverty in China has gone from 84% to 12%. If instead of taking the nationalistic stance that "Free trade is allowing the Chinese to take all our jobs" can't we say that the 72 point decline of extreme poverty in China is a good thing and the benefits of that decline far outweigh the lost jobs in America (assuming there really are lost jobs).

I sorta stopped reading after their whole Chinese flawed argument, got bored and so can't speak for the rest.

Same thing goes with the social security one. For social security its not a matter of if and its a matter of when. The social security fund will run out of money, and by then we will need massive cuts to fund social security. The choice is either small cuts now or larger cuts in the future. Its not a choice between cuts now or cuts maybe later like the comic paints it.

"Fourth, I'm not sure what his argument on currency exchange is. I mean is he arguing the Chinese will stop selling us electronics cause we want to buy them in dollars not Yuan. I'm not going to merit that with a response."

You clearly misunderstood. He wasn't saying they'd stop selling. He was saying we'd stop buying when the Yuan to USD exchange drops enough such that the cost of the homegrown TV is cheaper than the imported one.

" can't we say that the 72 point decline of extreme poverty in China is a good thing and the benefits of that decline far outweigh the lost jobs in America (assuming there really are lost jobs)."

You can say that if you want, but you are exchanging one nations people for another. Lost jobs are a fact. In fact, Walmart is pumping 90 billion dollars back into US manufacturing because they see the error of their ways recently with buying cheap overseas goods killing off US factories. And your Apple example is weak as that is one company. While most computer patents are US based, many TV and other electronic patents belong to the Japanese (Sony, for instance) and so those cheap Chinese jobs making Sony products do *not* bring money into the US.

oh, I didn't get to that part, last panel I read said
"But Americans pay in dollars. Chinese will wind up with dollars they can't spend in China" Then we see a sign that says Yuan only.

Looking at it more carefully, its a Chinese guy trying to buy groceries and not an America trying to by Chinese products. I guess what I inferred wasn't what he implied. All my other points still stand.

For more on the Walmart story I mentioned above.

http://business.time.com/2013/04/12/how-walmart-plans-to-bring-back-made-in-america/

But Draug, its not a zero sum exchange. There hasn't been a 72 point increase in poverty in America.

Trade has done more to alleviate poverty then either charity or foreign investment. That alone means that liberals who claim to care about the poor should be massive supporters of free trade.

Anyway, I've got a hockey game to watch, talk more later.

I don't care about "zero sum", I care about Americans. Call me a nationalistic asshole, but my country's people are more important to me because they are my neighbors and my friends and my family. I have more akin to and feel more concern for the homeless in my own city than the entirety of China.

And, in case anyone is wondering, I think Walmart upped their numbers. That story is from 2013 when it was 50 billion, but their recent ad on the Olympics said 90 billion.

Pretty interesting strip, ora, thanks. I don't agree with it on all points, but it was informative, clear, and thought-provoking, which is a good start.

What does Walmart's marketing campaign have to do with free trade? Free trade doesn't force Americans to buy chinese goods, it gives them the freedom to choose, and Walmart is chosing America, I don't see why that denounces free trade...

I was using it as evidence that jobs *have* been lost to overseas manufacturing and that Walmart even recognizes their part in it. Nothing more.

No it doesn't mean anything. Manufacturing jobs have been disappearing, nobody disputes that, but the fact that America's unemployment remained at a consistent 4-6% for most of the last 30 years is proof that jobs haven't been disappearing.

Some jobs have disappeared yes, but other jobs have been created.

That 4-6% is a fallacy. You can't look at unemployment *rates* for three reasons. First, the working populace has grown. So 6% now is a much higher number than 6% then. Second, there are lots of people, especially recently, who have just stopped receiving unemployment benefits and given up looking. They don't get reported in that 6% figure. And third, you need to look at the number of available jobs versus applicants as well as the percent of working age people actually working to determine how bad the job situation is.

" First, the working populace has grown. So 6% now is a much higher number than 6% then."
Doesn't that prove my point that jobs haven't been destroyed?

"Second, there are lots of people, especially recently, who have just stopped receiving unemployment benefits and given up looking. They don't get reported in that 6% figure. And third, you need to look at the number of available jobs versus applicants as well as the percent of working age people actually working to determine how bad the job situation is."
Both of which were at lows prior to the 2008 recession. If you look up until 2007, there would have been no evidence of any jobs being destroyed.

All jobs lost were from the recession, not trade with China

"All jobs lost were from the recession, not trade with China "

The two are intertwined and can't be separated. Obama would like us to think so and that the recession is all Bush's fault, but everything contributed to it, including his own tax and spend (or just plain spend and find a way to pay for it later) economic policies.

Wait, trade with China caused the recission? LMFAO, please tell me that is a joke.

WTO is a series of agreements, about 60 in total.

Draug, this is the graph that you want - the U6 Unemployment rate (which includes part time and marginally attached workers). Its the better feel for true unemployment in the economy than the U3 (which is the commonly cited one)

http://research.stlouisfed.org/fred2/series/U6RATE

As you can see, changes in the U6 are caused by recessions. There has been no structural shift upward as this trade theory would suggest. Also, when looking at economic data you want to always look for stationary data if possible (meaning that there should be no trend over time with it). You can't look at the physical number of unemployed people, because right now we're probably at Great Depression levels if you use absolute figures, even though a far smaller portion of the population is unemployed.

The current account deficit argument is a real one, though, Fasces. There is evidence to suggest the current accounts in the Eurozone caused the 2012 Sovereign Debt crisis....or at least contributed to it. Not enough research has been done on it, but persistent current account deficits/surpluses are certainly not helpful to the economy.

"There has been no structural shift upward as this trade theory would suggest."

Try correlating this to a chart of average wages for those on the bottom four income quintiles in America and another for (REAL) inflation and I guarantee you that there is a definite and substantial long-term drop in demand for general labor in the US of A over the last few years. I'm feeling it, and I've got the once-coveted college degree and a stack of technical certifications. I'm having to compete with people in India making $10 per day, and finding that I'd be better off if I'd just go on welfare than actually trying to find work. Others I know - particularly those who have tried to enter the job market in the last five years - are feeling the "benefits" of "free trade" even more than I am and are making a less-than-survival wage despite college degrees and a quaint but certain belief that hard work will get you a good life in America.

A fanatical belief in the unmitigatable mutual benefits of "free trade" as a panacea for all is a sure sign of being in the sheltered Ivory Towers of Academia for a little too long.

Draug is a "nationalistic asshole", that's a bit harsh.
Is he really nationalistic?

http://economixcomix.com/home/tpp/

"Sixth, he's trying to turn this into an us vs them argument. China has benefits a lot from trade with America, since 1981 extreme poverty in China has gone from 84% to 12%. If instead of taking the nationalistic stance that "Free trade is allowing the Chinese to take all our jobs" can't we say that the 72 point decline of extreme poverty in China is a good thing and the benefits of that decline far outweigh the lost jobs in America (assuming there really are lost jobs)."

That is only your subjective position on social welfare, however undisputable you may see your position (preffering the welfare of the many over the welfare of the few). The actual distribution of benefits of free trade is very important in real world. That's why we have politics. It's also the reason this

"But Draug, its not a zero sum exchange. There hasn't been a 72 point increase in poverty in America.

Trade has done more to alleviate poverty then either charity or foreign investment. That alone means that liberals who claim to care about the poor should be massive supporters of free trade."

is irrelevant. Why should only 72% increase in US poverty outweigh the decrease in China? What kind of people have utility function going like "I enjoy being worse off as long as my foreign counterparts are doing better at a stronger pace"? Why should the unemployed shut up because someone else is profiting from having their job? Even if the "someone else" category incorporates more than the other worker - shareholders of the other worker's company, customers etc.? Should American shoemaker gladly accept losing his job so that a Chinese shoemaker, an American Nike shareholder and his neighbor can enjoy a job, more dividends and cheaper price?

And if anything, "trade" with China is far from an example of what usually passes for free trade. Establishing manufacturing plants in China is restricted and regulated, as well as repatriation of profits, which is why a much larger share of benefits of trade than usual actually stay in China instead of moving to US. China is using its power leverage to get more of the mutual trade than small Third World countries can. That's why it's doing so much better than almost every other developing country. It's a victory for regulated free trade that shifts the balance more in favor of the developing country.

Economic theory is quite clear that a small country having a FTA with a big one benefits more than the big one - because it assumes "fair" distribution of the benefits. In real world, things like institutional setting might mean they get a very small share of the mutual benefits - the small country is still better off, but barely. The distribution is not fair but still beneficial. If we then look at the section of population of the smaller country that benefits from the trade, maybe it's only a small subset that benefits. But maybe it benefits a lot. Maybe it benefits much more than other parts of the population that actually not benefit at all, but lose. Does the great benefit of the few outweigh the loss of the many? Should the net gain of the country be the selected measure instead of, say, minimizing the loss for every single individual? That's a political issue. A real world economic issue is always ultimately based on politics, because no one ever benefits at the same pace. Even if the policy pushed everyone towards Pareto-efficiency (where we will never arrive), as long as someone benefits less than others, it's still a political question and the policy might be ultimately rationally dropped.

tl;dr even if Free Trade always creates Greater Good, it might not be desirable.

Trade was not responsible for China's decrease in poverty. Rural development was.

http://siteresources.worldbank.org/PGLP/Resources/ShaohuaPaper.pdf

No mention of the left vs right struggle which is just a smoke screen. The real political battle is between the rich and powerful and everyone else.
This is why the rich fund both parties, so the masses can obsess about red or blue while the crooks in high places carry on their work.
You guys carry on waving your red and blue flags and trade insults, that is exactly what they want you to do.
And whatever you morons do, insist on lower taxes because like that extra $30 in your pocket at the end of the month will make all the difference right and then of course there is trickle down, because of course that is how investment works isn't it, to a moron maybe yes.
And of course if you call yourself middle-class and earn $60,000 a year the enemy is the poor living on handouts of $12,000 a year, not the guy earning $50m a year and paying fuck-all tax, are you worried that if you tax him he might leave the country, but his money has already gone to an anonymous account in Switzerland or the Cayman Islands. He left financially years ago because he is greedy and wants to pay the lowest tax possible.
This guy is calling you all mugs ...... is he wrong?
What to do?
Start giving out serious long-term jail sentences for financial misconduct and tax evasion.
Move the tax burden to people who can afford to pay it.
Tax wealth
Set up fair trade agreements, not ones that just make the rich richer
Stop buying cheap foreign goods you don't actually need, support your local businesses where and when you can
Stop blaming the poor and the unemployed for the financial state of your country, they are not the guilty, they are the victims of unsustainable economic policies.

Can I +1 2/3 of a post?

Ugh. Nothing is more annoying than someone you agree with 100% 75% of the time.

http://economixcomix.com/home/social-security/

This one is just as good, I just wish people could be bothered to read this stuff, it's a cool way of presenting quite complicated economic issues in a way that people can understand.............. even more importantly it is the truth.

Tolstoy - first off, there is no such thing as real inflation. There's different measures of inflation (PCE, CPI, etc) but inflation itself is solely a nominal value. Secondly, correlation, does not imply causation. I do not deny that Americans have been suffering from increased competition over the past few decades. But is this a bad thing? Does this not just make our economy adapt and improve in order to stay competitive? I don't see anyone complaining about the increased quality of cars after the Japanese entered the American market. Similarly, factories that once employed 100 people have closed and re-opened running on 25 while producing just as much. That certainly is not a bad thing. My friends working in investment banking even have parts of their jobs outsourced to India - they come in every day to an email from the Indian office containing the work that was done while they slept. It allows for a 24 hour workday for companies. Again, an improvement.

If you want to look at what is costing Americans their jobs now (less so in the past, but it's most relevant the past few years) then look no further than what you're reading this on. Computers and technology have driven a rapid structural change in the global economy the likes of which the world has never seen. More and more jobs are being replaced by robots and computers - from production to trading to service jobs. That is the biggest killer of American jobs. Far more than any trade deficit.

ulytau hits it on the head though. Free trade is better for all, but it has bigger advantages for some than others, which is frequently exploited by the politicians. The comic got it right in the sense that the biggest obstacle to economic progress is not free trade (or lack of) but our own political ineptitude and the unwillingness of parties to see the greater good of the world. Its also correct that the terms of trade aren't exactly "equal" with China. But that's why we don't have a Free Trade Agreement with China and lodge more complaints with the WTO than any other country.

And finally, Putin nailed it re: China's growth. It couldn't have happened without Deng Xiaoping's agricultural reforms in the 1980s. It was the necessary step before the market reforms of the 1990s which continued the massive amounts of growth China was seeing (by the early-mid 1990s the benefits of rural reform had about run their course).

Tolstoy, consensus is all about the 80/20 rule. I used to have that issue all of the time when in politics, 80% of the issues you accept as given, then you thrash out the controversial ones where you have a difference of opinion and let majority votes decide, this is the essence of a healthy fully-functioning democracy, sorting out the 20%.