Liberty Maven

The more I listen to politicians running for office pandering to the masses about “fixing” the economy and “creating” jobs, the more I think we ought to make it mandatory that all candidates have at least a rudimentary understanding of basic economic principles. Considering that no third-party candidate has any chance of winning, we’re going to get stuck with either McCain or Obama.   But both seem to be completely economically illiterate.

At the Independent Institute, Art Carden discusses this issue:

Barack Obama is campaigning for president under the slogan “Change We Need.” Unfortunately, many of his economic policy proposals would move us in exactly the wrong direction. As of this writing it appears that Senator Obama will be the next president of the United States. We can move forward by looking at the implications of some of his economic policy proposals.

Consider first the issue of trade. One of the fundamental principles of economics is that there are gains from exchange. During the third presidential debate, Senator Obama said that he believes in free trade but then proposed a slate of caveats and provisos that would undermine the principles of free trade. On the surface, environmental protection and labor standards sound noble, but they actually harm the desperately poor by artificially raising the cost of employing them and effectively legislating them out of the international marketplace. Restrictions on trade provide a short-run windfall for unionized American workers—a powerful Obama constituency—but this windfall comes at the expense of other Americans who have to pay higher prices and at the expense of poor people around the world who are then barred from the market.

Carden then goes on to discuss Obama’s ideas regarding NAFTA, the idea of “creating jobs”, unions, and the minimum wage.

Read the rest of the article here.