Sunday, May 25, 2008

Wire Hangers and Rubber Rooms

Sooo, I always like to cite a couple of back-of-the envelope calculations (as well as harder-core ones) about the gains from trade. 6-8 years ago there was something floating around about the gains from trade that put it at about $50-60,000 per job saved. So we could have levied a small non-discriminatory consumption tax on all goods sold (regardless of country of origin), redistributed every cent to those "hard working ... American" (wink-wink) that would have been laid off by the "great sucking sound" and we'd all have a little more than we did with the trade restrictions.

Another story has to do with rubber rooms. Because of labor obligations, most US-located assembly plants for US-label cars "employ" a certain number of workers in rubber rooms, where they essentially drink coffee and... (???).

But check this one out. In the US wire-hanger industry about 250, er, Americans are currently employed, facing competition (mostly from China) and are protected by a tariff. The Economists blogging staff estimates that the cost of the tariff to US dry-cleaning firms is about $212,000 per job saved.

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