Saturday, December 26, 2009, 10:58PM ET - U.S. Markets Closed.

Charles Wheelan, Ph.D. The Naked Economist

Charles Wheelan, Ph.D., The Naked Economist

Shooting Ourselves in the Economy

by Charles Wheelan, Ph.D.

Email this Page IM this StoryBookmark this StoryAdd to your Del.icio.us accountDigg this StoryPrint this Story
Very Good (518 Ratings)
3.1814666/5
Posted on Tuesday, November 27, 2007, 12:00AM

I was struck recently by a New York Times article on the devastating impact of economic sanctions on Gaza. Since Hamas came to power in Gaza and refused to renounce violence, Israel has sharply limited what can go in and out of the territory, leaving Gaza "almost entirely shut off from normal trade and travel with the world."

That makes sense. One way to punish nations that violate international norms is to isolate them from the global economy. These rogue actors can't buy the best of what the rest of the world has to offer, nor can they earn income by selling their goods abroad.

How Sanctions Work

That's what we're trying to do in Iran. The United Nations has imposed two rounds of increasingly harsh economic sanctions on that country for not suspending its clandestine nuclear program. The United States is encouraging countries like Russia, China, and Germany to get even tougher.

And history buffs will recall that during the Civil War, a crucial part of the North's strategy was imposing a naval blockade on the South, preventing the export of cotton to Europe in exchange for manufactured goods.

Sanctions are a potent weapon because they can impose serious economic harm on the target country. Gaza has been enduring a "deep economic depression" since the economic blockade was imposed. The Christian Science Monitor reports that tougher sanctions on Iran "would hit the ruling mullahs hard by raising Iran's already high unemployment, and perhaps force trickle-up regime change."

A Self-Inflicted Embargo

So here's what I don't understand: Why do so many of our presidential candidates, and a surprising proportion of the American population, believe that we should impose trade sanctions on ourselves?

After all, if you believe that the United States should trade less with the world (or if you oppose the expansion of trade), then you're essentially calling for a self-imposed economic embargo -- sanctions on ourselves. If curtailing global trade is bad for Gaza and Iran, how could it possibly be good for us? The answer is that it's not.

Yes, I've made the pro-trade argument before. But reading about the effect of sanctions in Gaza -- the opposite of free trade -- made me see the issue in a new light. The best way to understand why expanded trade is good for the United States is to look at why cutting off trade is so devastating in a place like Gaza.

Hitting Where It Hurts

What happens when a country is on the receiving end of a trade embargo?

1. New jobs are created as the result of "import substitution."

Some people obviously go to work producing the goods and services that no longer come from the rest of the world, so-called import substitution. Of course, these new goods and services are likely to be more expensive or of lower quality than what was available before -- or else no one would've been buying the imports in the first place.

2. Jobs are destroyed in the export sector.

There can't be too many export-related jobs if there are no exports. The less obvious point is that export industries tend to be where a nation is most efficient relative to the rest of the world -- or else the rest of the world wouldn't have been buying those goods.

3. Jobs are lost in domestic industries that depend on imported inputs or capital equipment.

This is a more subtle point; a domestic firm making products exclusively for the domestic market could actually be devastated by a trade embargo if it uses commodities or machinery or chemicals that come from abroad. As the New York Times describes Gaza: "One result has been the quick collapse of Gaza's private sector, unable to import necessary spare parts or building supplies or cloth."

4. Jobs are lost because the average person has less money in his pocket.

If consumers have to pay more for goods that were previously imported, then they have less to spend everywhere else. That hits restaurants, retailers, services, and other businesses that would appear to have no exposure to trade on the surface.

Tricks of the Trade

To summarize, restricting trade creates jobs in industries where a nation is not productive relative to the world; it kills jobs in industries that are globally competitive. Consumers pay more for basic goods, leaving them with less purchasing power for other goods and services (which kills still more jobs).

In short, cutting off trade leaves a country poorer and less productive -- which is why we tend to do it to our enemies.

Expanding trade does the opposite. It destroys jobs in industries where consumers would prefer to buy imports. That's an unpleasant process, but if you believe in capitalism, that's pretty much how it works. Meanwhile, trade creates jobs in sectors where we do things better or cheaper than the rest of the world. The whole process puts more money in the pockets of a typical consumer, raising our standard of living.

Unintentional Punishment

Thus, I support economic sanctions on Iran and Gaza. I don't support economic sanctions on the United States.

In fact, that suggests a question for the protectionist candidates seeking the presidential nomination in both political parties: "Could you please explain why your plan for helping the American middle class is essentially the same policy that you're advocating to punish Iran for building nuclear weapons?"

Email this Page IM this StoryBookmark this StoryAdd to your Del.icio.us accountDigg this StoryPrint this Story

Rate This story

Very Good (518 Ratings)
3/5
Sign-in to rate!

178 Comments

Showing comments 6-35 of 178<< PreviousNext >>
Sort: first to last

  • JamesS - Wednesday, December 19, 2007, 11:12PM ET  Report Abuse

    • Overall: 1/5

    Trade is great. A NET TRADE DEFICIT IS ALWAYS BAD. That makes this article diversionary globalist right-wing rhetoric. Don't buy into it for a minute. Get yourself out of debt as fast as you can - you can't help America but you can help your own family. If you want to be involved in debt, be a LENDER.

  • Yahoo! Finance User - Wednesday, December 19, 2007, 8:08PM ET  Report Abuse

    • Overall: 4/5

    This is a good point on why international trade is so beneficial for the U.S. Protectionists should see the bigger picture and realize the pros outweigh the cons.

  • Jhobitakis - Wednesday, December 12, 2007, 7:48PM ET  Report Abuse

    • Overall: 5/5

    What a beautiful way to argue the point. --John the Economist

  • Yahoo! Finance User - Thursday, December 6, 2007, 4:49AM ET  Report Abuse

    • Overall: 4/5

    From some of the comments I've read it appears some folks didn't understand the simple point of the article, and that is: If you want to bring harm to a person, country, enemy, etc. then restrict his trade. Therefore, by restricting ourselves from trading we are harming ourselves. Now, what's smart about that? A message to all the anti-trade folks out there: Trading has been going on since the first cavemen traded an ax for a bow. They both got a "good deal" 'cause neither of them could make the other's "product" as well -- if at all! It's the same principle today. Yea, some folks lose their jobs in the process, but many more have jobs due to trade. Get real and get used to trade, because it was here before we were, and it will be here after we are gone.

  • Yahoo! Finance User - Tuesday, December 4, 2007, 9:20PM ET  Report Abuse

    • Overall: 1/5

    Even a blind squirrel can see that imposing a trade sanction on a country which MUST import items that cannot be produced within is going to be detrimental. However, applying that scenario to a country which can and has produced all the goods needed to sustain itself is a different subject entirely. In order to sustain a global economy long term, you must also have a global standard of living. You can't have 1 wealthy country trading with 1 poor country and expect both countries to stay wealthy and poor, respectively. The currency exchange rates will eventually balance out. It is just a matter of time. That's exactly what has been occuring over the past years. All of the outsourcing is slowly but surely catching up, and the end result is elimination of the middle class. Why does it take 2 incomes to raise a family when 1 income used to be plenty if you had any sort of professional degree? Engineers(of all sorts) used to be considered upper middle class, but now they can barely afford to buy a house on their own. If you want to experience the same standards of living as other countries, then by all means keep supporting as much open trade as possible.

  • daniel - Monday, December 3, 2007, 4:10PM ET  Report Abuse

    • Overall: 3/5

    The ill effects of malnutrition do not imply that it's healthy to gorge oneself. Trade policy is similarly not black or white, but can be a useful tool if carefully wielded. Most often, however, it's wielded to deliver pork.

  • uclalien - Monday, December 3, 2007, 3:50PM ET  Report Abuse

    • Overall: 4/5

    Congratulations bishophicks! You win the mental midget award for lamest comment! How can a person who's better off actually be worse off simply because another person is more better off? The Onion did a hilarious video on pretty much the same subject. (If you want to see it, search Rich vs Super Rich on YouTube).

  • Shadi - Monday, December 3, 2007, 1:21PM ET  Report Abuse

    • Overall: 1/5

    Your economics point aside, thank you for supporting sanctions inflicted on the evil people of Gaza. Those malnourished, poverty-stricken people had it coming, didn't they? Elect a government unfriendly to the US, how dare they! The only thing worse than being ignorant is being ignorant and arrogant.

  • Raiddinn - Monday, December 3, 2007, 12:06PM ET  Report Abuse

    • Overall: 3/5

    The reason for the downfall of our middle class is because of the downfall of the financial IQ of our middle class, nothing more nothing less. Pretty much all of the problems we are trying to solve are because of middle class idiots. You want our import to export ratios to be better, you can have it at the same time you can make Mr. Middle class better off, just tell him to skip buying the 2 inch bigger plasma TV that he will be paying off for the next 40 years at the minimum on his credit card. One less item imported and that much less debt for the person. Its win win, come on people. Or about the adjustable rate mortgages that are killing our nation's ability to spend... if they would have thought about how much they were financing in real dollars and thought forward to what would happen after an adjustment rather than looking at the required monthly house payment up front... well we wouldnt be having this credit squeeze now would we... 1 1 = 2 for anyone that isnt aware. People think they can have it both ways and thats the problem. They want to act stupid and be rewarded for doing so. Raiddinn

  • William - Monday, December 3, 2007, 11:00AM ET  Report Abuse

    • Overall: 3/5

    Free trade does not equal free, unfettered capitalism. Capitalism needs to be on a leash so that some degree of balance can be maintained. Since the 80's the the share of our national income that goes to the top 1% has doubled. If the super wealthy take a larger and larger share of the pie, the rest of us are worse off, even if the pie is growing. From 2000-2007, income for EVERYONE up to the 95th percentile has been stagnant, which means ALL of the benefits of our most recent recovery have gone to the top 5% income earners. In the past 5 years, despite assuming more and more responsibilities and handle a broader range of work, my inflation adjusted pay has been flat - and I'm a college educated professional with 15 years of experience and consistently high performance rankings. To all those who say that I need to "update my skills" and "stay flexible" I have this question: Assuming I have the time, energy and money to go out and acquire new skills (I do), where should I concentrate my efforts? What new skills should I get? I started asking this question 2 years ago when the outsourcing wave started hitting around here and NO ONE has been able to give me an answer other than vague, useless advice like "make yourself valuable." I'm willing to update my skills, but it has to result in WORK and not a layoff notice because someone realizes that my updated skills can be had from the Phillipines at 30% of my pay.

  • Houman - Sunday, December 2, 2007, 9:04PM ET  Report Abuse

    • Overall: 5/5

    Simple economics..Trade is always good between the two parties who trade otherwise they wouldn't. My trading doesn't "hurt" you in anyway. However, if you stop me from trading you are really hurting me.

  • Richard - Sunday, December 2, 2007, 8:27PM ET  Report Abuse

    • Overall: 1/5

    It is all about cheap labor, and with our standard of living we cannot compete there. Corporations outsource every profession we have. Capitalism needs oversight, or pure greed takes over.

  • Yahoo! Finance User - Saturday, December 1, 2007, 9:32PM ET  Report Abuse

    • Overall: 1/5

    International norms?Is Gaza a nation? Gaza was exporting what to whom? To whom will Gaza turn for its necessities ,as the area is is incapable of producing the food, water,energy needed to sustain its population? Or, is this all just a program to reduce the population of Gaza and have the preset population replaced by "settlers" from an expansionist neighboring country? Where did those Gaza-ites live before 1960?

  • larry - Saturday, December 1, 2007, 2:14PM ET  Report Abuse

    • Overall: 1/5

    The problem I have with the author's thinking is that he uses the term protectionism to describe the issues that a couple of presidential contenders are raising regarding the downfall of our middle "working" class, which is very real and widespread (look at the census stats). Frankly, I have yet to hear anyone promote the idea of massive trade initiatives that would act like the crippling sanctioning that is being levered against Hamas. That said, Dr. Wheelan, what can be done to keep our middle class intact. If you are going to claim that lost jobs will be created in the service sector, than you are a fool. Jobs will be created yes, but going from a well-paying factory job to a paint mixer at home depot for half the wages isn't really helping the problem. And realistically, does how many factory workers will find decent paying jobs in the corporate world? Not many. So, then the only thing that will happen if the outsourcing trends continue, and unbalanced/deficit trading grows, is that we will be a country that will look like a third world nation, which unless you live in a bubble is precisely what is and has been happening at a stark rate of "decline." My opinion is this: The U.S. will revert back to its historical, pre 1950s "have and have not" state. The Economy will be plagued and substantially less dollar valued as the consumerist model breaks down. We'll probably have a war or two in someone's attempt to maintain global positioning despite the fact that the U.S. dollar can't buy a "Global" peanut and China and the EU use the value and power of their currency against the dollar to run the U.S. relevance into extinction, which is happening right now--just look at what is happening concerning the U.S.'s ability to buy cheap oil at a cost that gave us a competitive economic edge. Hmmm.

  • moving_averages - Saturday, December 1, 2007, 1:20PM ET  Report Abuse

    • Overall: 1/5

    The United States has defined terrorism under the Federal Criminal Code. Chapter 113B of Part I of Title 18 of the United States Code defines terrorism and lists the crimes associated with terrorism.[13] In Section 2331 of Chapter 113b, terrorism is defined as: …activities that involve violent… or life-threatening acts… that are a violation of the criminal laws of the United States or of any State and… appear to be intended (i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion; or (iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and… (C) occur primarily within the territorial jurisdiction of the United States… [or]… (C) occur primarily outside the territorial jurisdiction of the United States…" Sanctions == Terrorism

  • Yahoo! Finance User - Saturday, December 1, 2007, 10:12AM ET  Report Abuse

    • Overall: 1/5

    To Bob-- Unfortunately, you are not looking at the entire picture. You, too, are a one dimensional thinker. And who will balance the factors required for a strong nation you ask? We will--the real government--the final government. By how we vote; by how we religiously contact our elected officials with our demands; with donations; by running for office; by doing our civic duty; by reading and following the lead of our Founders! Do you think "markets" have the ability to create and maintain a world class nation in areas such as national security, low poverty rates, high technology, reasonable balance of trades, reasonable interest rates; reasonable rate of inflation; reasonable funding of the government; civil equalities--per the Constitution; and a host of even more absolutely critical factors? Without active management (called governance) AND intervention/oversight of voters, when needed, do you REALLY believe markets could solve the most key of our problems? That is naive, if you do. Markets are only part of the action. You and I and the 300 million people in America that want to protect our nation from becoming a Third World country, must get more involved. And, that means balancing many factors after prioritizing them, as done in Operations Research methodology--for example. Also, as common sense dictates. If our elected leaders do not comply with what keeps our nation strong and safe (both economically and physically), they can be voted out. Again, you live in a one-dimensional world called "free trade" which will soon destroy our nation, as free trade has no agenda nor does it prioritize or meet our needs and requirements. Free trade is the result of independent actions by all on the planet. But the goal is a strong nation (in all regards). Free trade does not yield specific results--but random and often negative results with regard to our nation's imperatives and goals. You may not agree, but these are the facts. A strong nation does not solely free trade make. (And no, I do not speak tariffs--I speak fairness).

  • Yahoo! Finance User - Friday, November 30, 2007, 6:17PM ET  Report Abuse

    • Overall: 2/5

    The basis of international trade is COMPARATIVE ADVANTAGE, not ABSOLUTEL ADVANTAGE. I simply do not see any of the pundits mentioning this. The difference is incredibly important: That is what assures everyone does "something", which is "what they are comparatively best at", not what they can do if they use child labor, ignore the environment, etc. to provide the absolute lowest production costs. Otherwise, as some commentators have correctly observed, all cars and most manufacturing goods will be manufactured in the US, and none here. Unless everyone likes the idea of becoming a nation of "burger flippers" (i.e. service sector, no-benefit employees), then we need to see China farming out some of their manufacturing to the US. This will mean US incomes will continue to grow and keep US AND CHINESE manufacturers afloat. Not just one, for a while, while the other goes into insurmountable debt and see their net worth and real incomes shrink by 2-digit percentages year after year after year... (see Euro against the Dollar since 2000, for example).

  • Yahoo! Finance User - Friday, November 30, 2007, 5:21PM ET  Report Abuse

    • Overall: 5/5

    I appreciate the fact that the author can admit he was wrong. I certainly agree with him and hope that he is right now.

  • tom m - Friday, November 30, 2007, 4:48PM ET  Report Abuse

    • Overall: 5/5

    That is probably one of the most succinct ways of putting it, and I couldn't agree more. I always laugh when people talk about protectionism because they may be making less. Their philosophy would mean they have more money and would be able to buy so much less for it.

  • Shawn - Friday, November 30, 2007, 4:35PM ET  Report Abuse

    • Overall: 2/5

    I can only assume Iran is now making spare F-14 parts and that all American cars will be made in China by 2010 =?) Find a balance Mr.Wheelan. Free trade is good only as long as US has something to trade. Please explain how our domestic economy (75% of which is consumerism) is sustainable.

  • Yahoo! Finance User - Friday, November 30, 2007, 4:26PM ET  Report Abuse

    • Overall: 1/5

    There are holes in your argument big enough to drive an oil tanker through. When I voted for Ronald Regan 25 years ago I thought I was getting someone who was concerned about the security of our country. We were just coming off the last major oil crisis and it would have been great timing to promote alternative energy. One of the first things he did was cut the piddling few dollars allocated in the federal budget for alternatives. Now we're coming off one of the greatest builing sprees in our history--and not a solar panel on any roof in sight. My electric bill is bigger than my first mortgage! Guess we had a different definition of security. What is obvious is that our trade and fiscal deficits are unsustainable. What is the end game here? If we keep buying every piece of plastic junk they send over here we will wind up owning all the landfill and they will own all the land. We were going to export what we were better at: our financial acumen. Think they still want to buy into that now? Or do you think they'll take all those excess dollars and buy the assets that generate the profits, or the natural resources they need, or lend them back to us at outrageous interest rates so we can dig ourselves in a little deeper? The Chinese did not learn free trade from us--they learned it from the Japanese: artificial barriers to imports which give your home grown industries time to gain market share (a flexible currency is supposed to be the great equalizer -- when the trade deficit get out of whack the currency stregthens and makes your exports less affordable). That isn't working. We think we've got the advantage of being able to buy things on the cheap. What do they think their advantage is? Look beyond the next quarter or even the next decade. The Japanese were able of offset their strengthening currency with major productivity gains. We can't do that if we're not producing anything that anyone wants to buy. Like Blanche Doubois, we will be dependent on the kindness of strangers (our trading partners), but unlike Blanch, we not looking a whole lot like Marilyn--more like her mother in law. Right now we've got a government that thinks your money is worth more than your labor, a fed that thinks borrowers and speculators are worth more than savers, and a society that thinks ball players are worth more than scientists. Remember the old adage: "If it's not fair, it's not free." We think we're sticking them with the short end of the stick. What are the consequences if we are wrong?

  • Yahoo! Finance User - Friday, November 30, 2007, 3:05PM ET  Report Abuse

    • Overall: 1/5

    Sorry Charlie but you have missed the mark on this one. This is why most PHD's teach instead of working in the real world. (no concept of reality) Perhaps you could explain your theories on free trade to the thousands of displaced toy manufacturing employees who have been replaced by a Chinese labor pool that works for pennys on the dollar free from government regulations. While you are at it you could aleviate some ot the financial and mental anquish that these folks are feeling now that they have replaced their factory job with one of the millions of service industry jobs created by the Bush administration at half (or less) their previous pay. Oh well, if all else fails just let them know that they can take comfort in knowing that their children are safer playing with these superior chinese manufactured toys.

  • Yahoo! Finance User - Friday, November 30, 2007, 2:43PM ET  Report Abuse

    • Overall: 3/5

    I'm surprised Mr. Wheelan did not point out that the US has in fact willingly imposed a complete trade sanction on itself in the past. In the lead up to the war of 1812, Thomas Jefferson chose to call a halt to all international shipping to prevent the British from commandeering US ships and conscripting the sailors against their will. This policy, usually referred to as the Jeffersonian Trade Embargo, was absolutely devastating to the US economy. There is a very good economic paper on the topic available at the link below (unfortunately it costs $5). http://papers.ssrn.com/sol3/papers.cfm?abstract_id=294741

  • Yahoo! Finance User - Friday, November 30, 2007, 1:28PM ET  Report Abuse

    • Overall: 2/5

    There will always be cases where free trade will hurt people just like protectionalism will help people in the U.S. Generally speaking, you can't stop progress. If the rest of the world is growing and advancing, it doesn't do any country any good to blockade themselves from the rest of the world. You have to take the good with the bad but it's always going to be more good than bad.

  • Dana - Friday, November 30, 2007, 1:06PM ET  Report Abuse

    • Overall: 5/5

    This was an excellent article. Blunt and to the point. The Protectionist attitudes will always hurt America. The World Economy is based off of the American Economy, why hold ourselves back. Trade is the greatest way to destroy poverty, famine, terrorism, dictatorships, communism, etc, etc... Will some in our country get filthy rich from this, Yes! But doesn't it also raise the bar of humanity at the same time, Yes! It is the only Win-Win scenario I can think of. Peace on Earth is a Christmas theme and I think it should also be the Capitalist theme.

  • Yahoo! Finance User - Friday, November 30, 2007, 12:45PM ET  Report Abuse

    • Overall: 5/5

    This article gives a very clear explanation of how trade policy works and how it impacts our country. Those of you who cannot understand this are just not willing to look at economic issues on a macro level. Just because a policy may seem to impact you negatively, that does not mean it is the wrong policy. We are no longer in the Industrial Age, so you are going to have to update your skills to succeed in the Information Age. Again, that's capitalism. You're going to need to embrace it sooner or later.

  • Yahoo! Finance User - Friday, November 30, 2007, 3:29AM ET  Report Abuse

    • Overall: 1/5

    Watching trade like some describe is incredibly insane. The Parrots of big biz are the same. They only care about personal profits at the expence of their fellow Americans. While free trade is defined by many as "they can do what they want and we have to do do what they want" is a dunce cap no matter what. Intelligence is not a sign of wisdom.

  • Sam - Thursday, November 29, 2007, 11:56PM ET  Report Abuse

    • Overall: 2/5

    I did not read the article to completion, but I have read his prior articles. In his previous articles, he had supported global trade. I do not have a Phd, but my observation and experience tells me that when jobs are exported people lose jobs here in USA. Similarly when foregin workers are imported, Americans lose jobs. People at the Fed Reserve, like Bernanke is not even aware of the fact that many highly educated skilled workers lost their jobs due to out-sourcing or in-sourcing (jobs to imported temp foreign workers). Government workers do not lose jobs, they think rest of the world is the same way. Corp America's executive level is where the problem is, they make hundred's of millions even a Billion ( one health care executive made), and deliver negative results, then lay off people or export jobs. The other problem is most unions. Instead of having unions, we should have fair labor laws for every one, we should also have a national pension plan for all workers. Why do we have these double and triple standards in what we call a great democracy. There are many white collar workers sweat shops, and many of these workers who do not belong in any of the above categories lose their jobs and no one to protect. In addition we elect lawyers as poilitical leaders at different levels of the government. Lawers are not trained for managing, they are trained to be in courts and win cases. We should be electing Mathematicians, Scientists and Engineers to govern. Engineers have great minds and inherent management skills in their training. We can see that in some of these emerging markets, when people with mathematical backgrounds became leaders, these countries emerged and destined to become world powers. Case in point, for many years in India like in America, leaders were from law background. In the last couple of decades the new leaders are from mathematical or Engineering back ground. With this change remarkable results have been acheived in a short time frame. Recently retired president of India has a Phd in Science/Engineering, and the current prime minister holds a Phd in Economics. Since the retirement of the president, a women with a Law degree has been appointed again. How can a person with a law degree develop a country, and take it forwards in this technological world that needs business and engineering type background to mold. Similarly recently retired top chinese premier is also a scientist (with a PHd I believe in Chemistry), during her watch China made great advances in their economy. I know I have several points here that seem unrelated, but they are. Global trade at the expense of American workers jobs is not a good thing. I do not understand why would Dr.Wheelan or American leader ship support this idea, there jobs have not been out-sourced I suppose yet. Only great positive thing about Global trade is that hopefully poverty in many nations will be gradually eliminated, but it should not be at the expense of some one losing a job, instead it should be a planned phase in approach.

  • Bob - Thursday, November 29, 2007, 10:16PM ET  Report Abuse

    • Overall: 5/5

    Excellent insight and argument. To rcarrows2: You say you can identify a dozen or two factors that must be balanced properly (to achieve some unstated goal). Do you want to trust this balancing act to some committee in the US Dept of Commerce, or to 454 US Congresspeople, or to the AFLCIO, or are you volunteering to decide for all of us what goods & services we need and where and how they should be produced? Thanks but no thanks. I'll take a largely free market balancing of all these factors any day over the failure- and repression-prone central planning approach.

  • Marie K. - Thursday, November 29, 2007, 8:53PM ET  Report Abuse

    • Overall: 2/5

    So.. Toyota (and Honda) outsells Ford and GM here and abroad because they practice "unfair business practices"? Shouldn't we attribute the Japanese auto makers success to: * Focus on quality; * Focus on fuel efficiency; * Focus on Manufacturing Strategies; * Focus on delivering to consumers what they want.. n this meantime, the US automakers are: * Trying to shove gas guzzlers down the consumer's throat * Still lagging way behind in quality; * Still lagging way behind in manufacturing efficiencies * Paying obscene compensations to their managing boards ( 12 fold or higher than their Japanese counterparts) * Diverging from their core business (auto manufacture) in favor of financing, IT technology and other failed ventures; * Shooting themselves in the foot by following obsolete Union labor practices; The "Big 3" have nobody else but themselves to blame for the lost of the domination in the auto market for the Japanese and Europeans.. Americans who complain that they are treated unfairly relative to the rest of the world, should travel abroad more frequently to really understand what they are talking about.

Showing comments 6-35 of 178<< PreviousNext >>
The columns, articles, message board posts and any other features provided on Yahoo! Finance are provided for personal finance and investment information and are not to be construed as investment advice. Under no circumstances does the information in this content represent a recommendation to buy, sell or hold any security. The views and opinions expressed in an article or column are the author's own and not necessarily those of Yahoo! and there is no implied endorsement by Yahoo! of any advice or trading strategy.

More From Charles Wheelan

Naked Economics: Undressing the Dismal Science

An accessible and entertaining introduction to economics for lay readers, now available in paperback.

View more about Charles Wheelan.

The Chicago Tribune described Naked Economics as "clear, concise, informative and (gasp) witty."

Order Naked Economics today. Average customer review on Amazon.com: 4.7 out of 5 stars.

More from Yahoo! Sources

  • CNN Money
  • Consumer Reports
  • Kiplinger
  • The Motley Fool
  • Business Week
  • Wall Street Journal

Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data and daily updates provided by Morningstar, Inc. Fundamental company data provided by Capital IQ. Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.

Yahoo! Answers is provided for informational purposes only, and no Q&A is intended for trading or investing purposes. Yahoo! shall not be responsible or liable for the accuracy, usefulness or availability of any Q&A information, and shall not be responsible or liable for any trading or investment decisions based on such information. View Complete Answers Disclaimer.