Stossel on outsourcing
It was Stossel vs Dobbs. Stossel won on the rhetoric. On the facts, he’s still wrong.
Stossel showed a chart called the “Clothing Price Index.” I’ve been unable to find the data for that chart, but here’s the Consumer Price Index since 1990 when outsourcing began in earnest.
As outsourcing increases, so do prices. According to faith-based economists, that can’t happen. Their theory says outsourcing should produce lower prices.
It would be true, if money were asset-based. It’s not. Money exchange rates are set by fiat. Lower price inputs in China do not imply lower real prices for the imported goods in the US.
It’s a fact, real prices have steadily increased as we have imported goods from countries with lower price inputs. If the theories of faith-based economists cannot account for this fact, then their theories are either inconsistent or incomplete. I think Monetarism is inconsistent, while the Austrian School theory is incomplete.
The Austrian School has ignored the effect of multiple equilibiria – money-price and product-price equilibiria in a fiat currency system. Multiple equilibiria changes radically the logical analysis of trade under comparative advantage. Austrian School economists ignore this fact. They simply duck under the water and fish out one red herring after another.
Faith-based economist are still ducking the issue. Man up boys. Hear that Stossel?
Probably not.
