International Trade

1. When politicians speak of the need for trade protection, it is rare that anyone points
out the increased costs consumers will pay as a result. In essence, the leadership
promises to transfer wealth from a large number of voters to the hands of a relative
few. How do governments create trade protection for a minority at the expense of the
majority, or at least a much larger group, of voters? Why does the majority not
object? Why do politicians who propose trade protection get reelected?

2. During 2011 and 2012, President Obama praised firms that moved jobs from
overseas to the United States, referring to this shift as in-sourcing. His
administration proposed policies that would encourage such in-sourcing. Is this not
another form of protectionism? What are the merits and costs of such a policy?
Would it work better for some industries than others? Why?

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