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article6 - not tearing down trade barriers Many people see...

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http://gregmankiw.blogspot.com/2007/07/two-questions-about-taa.html Professor Mankiw talks briefly about the Trade Adjustment Assistance program. Congress is about to consider enlarging this program. Greg wonders whether you can really tell whether worker is losing his job due to trade or due to other forces, such as technological change and whether a worker who loses a job due to trade deserving of a more generous safety net than a worker who loses his job due to other forces, such as technological change? This is economically nonsensical, but from a moral standpoint, there is a logical rationale: Government could choose to protect jobs lost "due to trade" by putting up (or
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Unformatted text preview: not tearing down) trade barriers. Many people see American workers losing their jobs, apparently due to trade, and oppose free trade agreements on that basis. By offering TAA, the government can theoretically provide both equity and efficiency by redistributing some of the gains of trade to those who lose out from it. One could even argue that they have a responsibility to do so, just as government has a responsibility to pay a just amount for property taken via eminent domain, even though they are converting it to a more productive use....
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