Must-Read: In which I (momentarily, for then I look out my office window) envy Mark Kleiman his job at NYU's Marron Institute and consequent ability to bump into the extremely-sharp Paul Romer in the hallway. (I had what had previously been Paul Romer's office at Berkeley for twenty years; but that is not the same.) This is perhaps the smartest thing I have heard so far this year:
: Trade and Downward Class Warfare: "A conversation with my Marron Institute colleague Paul Romer yesterday...
...crystallized an idea I’d been toying with for some time.... Opponents of taxing the rich have destroyed, on a practical level, the theoretical basis for believing that free trade benefits everyone. The Econ-101 case for free trade is straightforward: Trade benefits those who produce exports and those who consume imports... hurts... producers of goods which can be made better or more cheaply abroad [and consumers of goods whose prices are raised by increased exports of them]. But the gains to the winners [substantially] exceed the losses to the losers....
So when the modern Republican Party (R.I.P), in the name of ‘small government’ and opposition to ‘class warfare,’ set its face against policies to redistribute the gains from economic growth, it destroyed the theoretical basis for thinking that a rising tide would lift all the boats, rather than lifting the yachts and swamping the trawlers. Free trade without redistribution (especially the corrupt version of ‘free trade’ with corporate rent-seeking written into it) is basically class warfare waged downwards....
The bottom line is that all of the gains, not merely from trade but from economic growth, have been concentrated in the hands of a relative few. And worsening inequality harms the relative losers even if their absolute incomes do not fall. Rising mortality rates among non-Hispanic white people without college degrees... attracted less attention than it deserved.... The Trump phenomenon... suggests that growing mortality does, in fact, reflect a deeper malaise.... This is not a problem that can be cured by listening to Mitt ‘47%’ Romney...
http://www.washingtonmonthly.com/ten-miles-square/2016/03/trade_trump_and_downward_class059814.php
