Tag Archives: Regulation

The Comparative Advantage of the U.S. Economy

Recently, there has been a large amount of media attention focused on Donald Trump’s hatred of the North American Free Trade Agreement (NAFTA).  This animosity has also been targeted at CEO Mark Fields’ to move parts of Ford’s manufacturing to Mexico. Sadly, logic and fact have taken a backseat in both of these discussions. Clichés from Trump dominate the media scene, including a recent quote highlighted on CNN, “NAFTA has destroyed our country.” This statement is far from the truth. No matter what clichés Trump or any other political candidate throw at NAFTA, the American people should not be fooled: NAFTA allows the U.S. to succeed in attracting higher-paying jobs, which is currently the country’s comparative advantage on the international market.

Trump’s main argument  is that NAFTA allows for jobs to easily move from the United States to Mexico, thus hurting the U.S. economy. Trump’s proposed solution includes destroying the NAFTA pact and the implementation of a hefty 35% tax on all imported cars.  Not only will Trump’s proposed solution harm the U.S. economy, he also has incorrect premises involving NAFTA. NAFTA encourages some manufacturers to leave the U.S., but this does not necessarily hurt our economy, especially if the U.S. is importing other jobs as well as increasing its consumption and investment through the open trade environment that NAFTA creates. Some honest, hard-working Americans will lose their jobs in the short run, but if a system of free trade is protected, the long-run will produce lower unemployment rates and an increase in the well-being of every consumer.

The law of supply and demand applies to the job market just as strongly as it applies to other economic goods. In the Ford case, the company has a demand for low-paying, unskilled labor, which Mexico can supply with ease. Therefore, it makes sense that Mark Fields would move some of his manufacturing plants to Mexico where Ford can make a larger profit and where workers are willing to work for less. This is one comparative advantage that the working class in Mexico has, the ability to work low-skilled jobs at a cheaper rate. Mexico’s lower cost of living allows for this comparative advantage to exist.

Continue reading at the Liberty Conservative.

Unleash Aboriginal business potential

The August 2016 decision of the Federal Court to award $3.3 million under the Native Title Act to traditional owners who were dispossessed of their land has once again made indigenous affairs a hot topic.

But land justice is a deeper concept than offering indigenous people piecemeal monetary compensation. We need a permanent solution that immediately improves outcomes for indigenous Australians across a variety of indicators such as life expectancy, employment, and incarceration rates. Aboriginal people have a life expectancy about 10 years less than non-indigenous Australians, are more likelyto be unemployed and are 13 times more likely to be imprisoned.

The current native title system tends to approach the problem by prescribing “traditional owners” who are often senior elders within a group of Aboriginals. Moreover, native title can only exist to the extent that there is no superior title to the land (for example, by mining companies or farmers). In practice, its scope is limited.

The effect of the present system has been to hamper the entrepreneurial talent of indigenous people living in remote communities. By now, we could have seen many Aboriginal millionaires who could have helped their communities in a far more effective manner than inefficient government programs ever could.

Instead, remote communities today are bastions of poverty.

Continue reading at Spectator Australia.

Watch out for this new Obama rule on student loans

If Pennsylvania residents think taxes are high now, wait until they catch wind of the bill they’ll be footing under a new Obama administration regulation that could allow thousands of students to default on their loans.NEW KAYTEE MOYER HEADSHOT.jpeg

The “borrower defense to repayment” regulation, created during the Clinton administration, was originally established to protect students from being exploited by universities.

If a university were to break state laws, students could petition to challenge their loan repayments.

However, new amendments to these regulations, which are currently in review before final publication, creates murky waters for students to evade repaying their loans, forcing taxpayers to pick up the tab.

Continue reading at PennLive.