The Economic Effect by Richard Sessa

Why Free Trade Matters

Saturday, July 16, 2011 

                        It is common to hear political elites, media “analysts,” and even business leaders promote trade tariffs and quotas to help protect American manufacturing companies.        Recently, Donald Trump blamed China for taking valuable US jobs during a time when the unemployment rate is abnormally high. He claimed that if he were elected president, he would impose a trade tariff on all Chinese imports to protect American jobs. However, international free trade is one of the necessary keys to economic prosperity and the creation of wealth. Trade policies designed to protect American jobs or to help promote American national security interests may have good intentions, but they are ultimately deleterious to a smooth economic recovery.  Read More...

Jobs Do Not Matter: An Economic Perspective

Sunday, July 10, 2011 

                        This week the Bureau of Labor Statistics released the Employment Situation Report for the month of June. It indicates that for the month of June 2011, the unemployment rate increased slightly to 9.2 percent. Economists are in agreement that a “healthy” unemployment rate should be somewhere between 4 to 6 percent. Political leaders, including President Barack Obama, have primarily focused on the role of jobs in this economic recovery. However, the objective of job creation has largely obscured the optimal path for the economic recovery. Every economic activity occurs to promote the end goal of consumption. In a free market economic system, efficient economic activity occurs when producers are creating goods and services that consumers highly value. Employment is merely a by-product of these productive services, and jobs alone cannot promote economic prosperity. Read More...