Tag: free trade

No Set Prices?

bargaining, dickering, negotiating, free trade, price, illustration, Buying Power

“Paul,” an old boss of mine used to say, “there are no set prices.”

He meant that when a vendor said it would cost x, my choice wasn’t just yes or no. Negotiate. I could say, “Boy, I’d sure like that, but golly, I can’t afford to pay x. Any chance you’d consider 4/5ths of x?”

It was amazing how often I bought what was priced at x for less than x.*

Consider government waste — from the Pentagon’s $400 hammers to millions in cost overruns for weapons systems. Politicians pay lip service to getting waste under control, but actually do something about it?

Yeah, right.

That’s why I took notice last December when then President-Elect Trump tweeted “Cancel order!” in response to the high price of a future Air Force One from Boeing. Then, Trump sent Lockheed stock down 3 percent with another tweet:

Based on the tremendous cost and cost overruns of the Lockheed Martin F‑35, I have asked Boeing to price-out a comparable F‑18 Super Hornet!

“Mr. Trump … would like to squeeze Lockheed for a better deal …” the New York Times explained, adding that Trump had “sent shock waves through the military industry.”

Sen. Richard Blumenthal from Connecticut, where the F‑35’s engines are manufactured, responded, “The suggestion that costs are out of control is just plain wrong.”

Well, last week, CNN reported that, “Defense giant Lockheed Martin has agreed to sell 90 new F‑35 fighter jets to the US Defense Department … a deal that amounts to more than $700 million in savings over the last batch of aircraft delivered.”

There are no set prices.

This is Common Sense. I’m skinflint Paul Jacob.

* Even when a vendor wouldn’t budge on price, I could always call back a day later and say I’d finagled a way to afford it. Even then, the message that cost mattered likely started any future negotiations from a better position.

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Tags bargaining, Buying Power, dickering, free trade, illustration, negotiating, price

Accountability free trade & free markets general freedom moral hazard nannyism responsibility too much government

States of the Unions

Brexit, Europe, hysteria, trade, economics, illustration

As Americans contemplate the intellectual breakdown of our two major parties, Brits and Europeans are trying to figure out what the state of their union is.

Does Brexit spell disaster for Europe?

Germany’s vice-chancellor is just the latest European bigwig to preach gloom and doom. According to the BBC, “Sigmar Gabriel said the EU would go ‘down the drain’ if other states followed Britain’s lead and that the UK could not keep the ‘nice things’ about Europe while taking no responsibility.”

What that “responsibility” is, I do not know.

But look: it is not as if an international order is all that difficult. In the 19th century, freedom of movement was accepted as the civilized standard — except in Russia.

In the 1800s, Britain and France agreed to bilateral free trade, and then Britain went unilateral with free trade. Prosperity ensued in Britain. Even in Europe proper, the century-long trend of wealth was upward.

And now a number of economists are advising the new British government to follow that old path — “a unilateral free trade deal would allow the UK to import cheaper goods and gain access to new markets, delivering greater prosperity,” The Guardian summarized.

Maybe the EU should go under. For the key to the union was subsidies along with EU-regulated trade. European states could adopt free trade without bullying from Brussels. And forget subsidies as a way of life.

America could do likewise, but not if Hillary or The Donald gets elected.

This is Common Sense. I’m Paul Jacob.

Note: In most browsers, hovering your mouse over the bolded, silver text will give you “footnotes” of explanation.

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Tags Brexit, Europe, free trade

free trade & free markets general freedom national politics & policies

Why Protectionism

Donald Trump, Bernie Sanders, economics, free trade, collage, photomontage, Jim Gill, Paul Jacob, Common Sense

Why do so many people (especially politicians) favor high tariffs, “managed trade,” embargoes and domestic subsidies, all of which — first as “mercantilism” and then as “protectionism” — have been debunked, repeatedly (demonstrated as ineffective economic policy), since Adam Smith’s famous 1776 attack?

Economist Donald Boudreaux, in an excellent defense of economic principles, explains why the Bernie Sanderses and Donald Trumps of this world support anti-free trade nostrums — out of sheer ignorance:

The typical politician opposes free trade because he … doesn’t understand that the purpose of trade — any trade — is to enrich people as consumers and not to enrich people as producers. He doesn’t understand that exports are a cost and that imports are a benefit; he thinks that it’s the other way ’round. He doesn’t understand that the specific jobs lost to imports are not the only employment consequences of trade; he doesn’t understand that trade also “creates” jobs in the domestic economy.… He, in short, doesn’t understand the first damn thing about the economics of trade.

But what protectionists do understand are direct appeals to “good results” (like more and better high-paying jobs). The fact that their proposals throw a monkey wrench into the diverse mechanisms of trade, yielding worse results?

They just don’t see them.

Why? Because real economies are complex, and protectionists lack the science that would help them trace the consequences of their policies.

The fact that they’ve focused their whole attention on the business of “governing,” and making simplistic, direct appeals to people who are also uneducated in economic principles, doesn’t help.

This is Common Sense. I’m Paul Jacob.

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Tags 2016 Presidential race, Bernie Sanders, Donald Trump, economics, free trade, Presidential campaign 2016

crime and punishment

Life in Prison [x 2]?

As I worried, this weekend, about Dr. Annette Bosworth, and her future sentencing for the “felonies” (minor infractions) she committed in South Dakota, others were similarly anguished about Ross Ulbricht.

A judge just gave him two life sentences in prison for setting up the “Dark Web” anonymous trading service “The Silk Road.” He begged for leniency — “just give me my old age,” the 31-years-old pled — but District Judge Katherine Forrest proclaimed “lawlessness must not be tolerated,” judging Ulbricht “no better a person than any other drug dealer.”

According to the BBC, “Prosecutors say that six people who died from overdoses bought drugs via the site and that such untraceable deals earned Ulbricht at least $18m.” This is supposed to make us hate him as a “drug dealer.”

Which he wasn’t. He set up a trading website — albeit a no-tax, black-market one. The actual trades were the responsibility of the traders. Like on eBay. Emptors caveated, knowing what they were doing.

Curiously, his site could only be accessed using software produced by the U. S. government. Using the judge’s rationale, maybe the federal government should be tried?

Some would say that drug overdoses are the responsibility of the drug users — but more to the point, the main factor in illegal drug overdoses remains their illegality. Not given the sunshine of a legit market, actual dosages are hard to manage: producers don’t usually bother with consistency, immune as they are to the reputation aspects of legal markets, not to mention any regulation or tort law influences that affect legal products’ safety.

In reality, those six deaths are more a result of the government than Mr. Ulbricht.

This is Common Sense. I’m Paul Jacob

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