Libertarian Saturday

Aaron Russo's sizzling new documentary "America: Freedom to Fascism" received this rave review from CBS's Todd David Schwartz:

"FOUR STARS (Highest Rating): The scariest goddamn film you'll see this year. It will leave you staggering out of the theatre, slack-jawed and trembling. Makes 'Fahrenheit 9/11' look like 'Bambi.' After watching this movie, your comfy, secure notions about America -- and about what it means to be an American -- will be forever shattered.

Producer/director Aaron Russo and the folks at Cinema Libre Studio deserve to be heralded as heroes of a post-modern New American Revolution. This is shocking stuff. You'll be angry, you'll be disgusted, but you may actually break out in a cold sweat and feel a sickness deep in your gut; I would advise movie theatre managers to hand out vomit bags. You may end up needing one."

"In an annual security conference on Saturday (June 3), Donald Rumsfeld assured the audience, 'We don't intend to occupy for any period of time. Our troops would like to go home and they will go home.'

Why, then, would the United States be building an enormous embassy in Baghdad and a base so large it eclipses Kosovo's Camp Bondsteel, which had been the largest foreign U.S. military base built since Vietnam? The new embassy, which occupies a space two-thirds the area of the national mall in Washington DC, comprises 21 buildings that will house over 8,000 government officials.

It has a huge pool, gym, theater, beauty salon, school, and six apartment buildings. The gargantuan military base, Camp Anaconda, occupies 15 square miles of Iraqi soil near Balad. The base is home to 20,000 soldiers and thousands of 'contractors'.

The aircraft runway at Anaconda is the second-busiest in the world, behind only Chicago's O'Hare airport. And, depending on which report you read, between six and fourteen more U.S. military bases are under construction in Iraq. It doesn't appear we'll be leaving anytime soon -- or anytime, really." --
Marjorie Cohn, Truthout.

QUESTION:
"In an economy without any 'trade barriers,' where the market can be flooded by less expensive imported goods at a price our domestic manufacturers cannot hope to compete with, what is going to stop domestic jobs from rapidly going overseas to cheap-labor countries?"

MY SHORT ANSWER:
"Some jobs will indeed go overseas, but here we'll experience a net *gain* in the number of jobs and the wages we're paid. Everyone wins. Here's how it works.

"Let's assume that cheap-labor countries can manufacture and ship clothes to us more economically than our domestic industry. Our clothing bill goes down, leaving us more money to buy something else, say, computers. More high-tech, high-paying jobs are created here to meet the increased demand. We'll experience a net gain in jobs, because our human capital is more efficiently allocated. Uneducated cheap labor is manufacturing, and skilled technical labor is innovating.

"Of course, the domestic clothing workers will experience some trauma as they scramble to find new positions. Most will end up in jobs that are more interesting and demanding as our work force as a whole shifts to become more technical. Like the rest of the country, they will benefit from the lower clothing prices and the higher standard of living made possible by the
more efficient division of labor.

"Countries that 'protect' inefficient industries with trade barriers keep consumer prices high and prosperity lower than it otherwise would be. In the U.S., for example, we pay more for automobiles than we would if tariffs on imports were abolished. Every extra dollar we spend on automobiles is one less for the computer and other domestic industries that compete well in the international markets. Tariffs put our market leaders at risk to preserve inefficiency. Ultimately, everyone -- even the automobile workers -- lose by higher prices and the lower standard of living."