Frontline, Wal-Mart, and Trade
I've been a huge fan of Frontline over the years, it’s one of the best shows on TV. The “Is Wal-Mart Good for America?” report, which I just saw last night, doesn’t seem to live up to its typically high journalistic standards. While maintaining a superficial level of even-handedness, it definitely seemed like it had an anti-Wal-Mart axe to grind. Another way of putting it is that it appeared to be a largely anti-trade piece, with Wal-Mart as our “evils of globalization” poster child.
Possible ideological biases aside, part of why so many of these pieces skew anti-trade is laziness. It’s extremely easy to show sympathetic images of factory workers being laid-off, their livelihoods, and lives, upended and uncertain. But the upside is really there, it’s just harder to show, partly because it’s more diffuse. Sure, as one of the anti-trade economists observes, working class Americans are BOTH consumers and workers. Consumers pay lower prices, and nobody really thinks that is bad in itself, but then closing factories does hurt a smaller number of people badly. He proceeds to state that he “believes” the net effect on the American economy is bad. This is in response to a Cato Institute fellow (probably “fellow” in both senses) who pointed out the standard upside: the greater well-being of all the cost-conscious consumers, who then have more money to spend on other things, which in turn stimulates the economy and creates jobs somewhere else.
Well, I don’t know that it’s clear whether “Cato-guy” or “Protectionist-guy” is right, in the balance. It depends, crucially, on the where the savings go. Say Jane consumer buys a Chinese-made blouse for $15 instead of an American-made one for $20. It’s all about what Jane does with the $5 she saved. Does she just sink it into more cheap Chinese goods? If so, Mr. Protectionist is probably right. Or does she put it toward some domestically produced good or service, or God forbid, save it? If so, Mr. Cato is probably right.
This is a complicated issue, and one I find very interesting. The answer(s) is (are) not so straightforward. Economists don’t all agree, but there is actual data out there. For instance unemployment has remained low and I believe that in general, real wages have held steady or risen, and the share of national income going to labor has remained stable. Seems like a point for pro-trade, but there are still subtleties to be explored. For example, how does the job and wage picture break down across income groups, skill levels, etc.? Why not show some of the data, and let some economists duke it out? I expect the cable news networks, with their tiny attention spans and competitive ratings pressures, to take the shallow route (I can hear Lou Dobbs beating his one big drum now), but this is public television, for crying out loud! Do some work guys! If PBS doesn’t do it, who will?
Possible ideological biases aside, part of why so many of these pieces skew anti-trade is laziness. It’s extremely easy to show sympathetic images of factory workers being laid-off, their livelihoods, and lives, upended and uncertain. But the upside is really there, it’s just harder to show, partly because it’s more diffuse. Sure, as one of the anti-trade economists observes, working class Americans are BOTH consumers and workers. Consumers pay lower prices, and nobody really thinks that is bad in itself, but then closing factories does hurt a smaller number of people badly. He proceeds to state that he “believes” the net effect on the American economy is bad. This is in response to a Cato Institute fellow (probably “fellow” in both senses) who pointed out the standard upside: the greater well-being of all the cost-conscious consumers, who then have more money to spend on other things, which in turn stimulates the economy and creates jobs somewhere else.
Well, I don’t know that it’s clear whether “Cato-guy” or “Protectionist-guy” is right, in the balance. It depends, crucially, on the where the savings go. Say Jane consumer buys a Chinese-made blouse for $15 instead of an American-made one for $20. It’s all about what Jane does with the $5 she saved. Does she just sink it into more cheap Chinese goods? If so, Mr. Protectionist is probably right. Or does she put it toward some domestically produced good or service, or God forbid, save it? If so, Mr. Cato is probably right.
This is a complicated issue, and one I find very interesting. The answer(s) is (are) not so straightforward. Economists don’t all agree, but there is actual data out there. For instance unemployment has remained low and I believe that in general, real wages have held steady or risen, and the share of national income going to labor has remained stable. Seems like a point for pro-trade, but there are still subtleties to be explored. For example, how does the job and wage picture break down across income groups, skill levels, etc.? Why not show some of the data, and let some economists duke it out? I expect the cable news networks, with their tiny attention spans and competitive ratings pressures, to take the shallow route (I can hear Lou Dobbs beating his one big drum now), but this is public television, for crying out loud! Do some work guys! If PBS doesn’t do it, who will?
posted by wRONgainey at 9:11 AM
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