Mr. Blinder’s answer is not protectionism…he accepts the economic logic that U.S. trade with large low-wage countries like India and China will make all of them richer — eventually. He acknowledges that trade can create jobs in the U.S. and bolster productivity growth. But he says the harm done when some lose jobs and others get them will be far more painful and disruptive than trade advocates acknowledge. He wants government to do far more for displaced workers than the few months of retraining it offers today. He thinks the U.S. education system must be revamped so it prepares workers for jobs that can’t easily go overseas, and is contemplating changes to the tax code that would reward companies that produce jobs that stay in the U.S.
Here is the article. Arnold Kling says technological progress will be more important than trade. I think that China is due for a crack-up and India will soon bump up against its horrible legal and educational systems. I saw that economists are listed as among the most threatened groups, but I doubt if the United States can look forward to the liberation of so much talented and witty labor. I also think that corporate welfare is a bad idea, and that universities should not train everyone to be a small town divorce lawyer. Teaching reading and writing would be a good start.
When our economists start preaching that we should look to economists and higher educators to predict the new, growing economic sectors, I again think that the Chinese are not the major problem.