EconTalk Kimberly Clausing on Open and the Progressive Case for Free Trade
Dec 30, 2019
Kimberly Clausing, a Professor of Economics at Reed College and author of "Open," dives into the complexities of free trade with host Russ Roberts. She discusses the impact of globalization on American workers and the rising income inequality. Clausing advocates for free trade but emphasizes the need for interventions to support affected communities. The conversation touches on trade deficits, the challenges in industries like steel, and the importance of progressive taxation and inclusive policies to tackle economic disparities.
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Debate on Average American's Economic Progress
- The average American's economic well-being over the last 30-40 years is debated.
- Russ Roberts is skeptical of the evidence suggesting stagnation for the average American, citing inaccuracies in inflation measurement and demographic changes.
Critique of Economists' Policy Approach
- Economists often recommend optimal policies but fail to address their political feasibility.
- Kimberly Clausing criticizes this tendency, advocating for considering political realities when designing economic policies.
Trade Deficits and Macroeconomic Factors
- Trade deficits aren't caused by weak competitiveness but by macroeconomic factors like savings and spending habits.
- Countries with high spending and low savings, like the US, naturally run trade deficits.
