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    summary of Greenspan's opinion on trade

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    A http://www.federalreserve.gov/BoardDocs/speeches/2004/20040126/default.htm
    b. Read the above speech and summarize Greenspan's opinion on trade. Does he admonish the current administration's policies on trade? What does he say about job movement overseas and labor costs.

    © BrainMass Inc. brainmass.com December 24, 2021, 4:57 pm ad1c9bdddf
    https://brainmass.com/economics/finance/summary-greenspans-opinion-trade-18606

    SOLUTION This solution is FREE courtesy of BrainMass!

    Hi there,

    I am not sure how much detail you are expecting for an answer, however, I will do my best to be of assistance.

    Greenspan's opinion on trade:
    There are a few snippets of info scattered throughout his speech that elude to the fact that he is very much in favor of free trade. Trade is first mentioned in the last sentence of paragraph 6 - how the lowering of trade barriers had spurred economic activity.

    I believe that his opinion on trade is best summed up by his last two paragraphs. I have copied them for your review:

    For the most part, we in the United States have not engaged in significant and widespread protectionism for more than five decades. The consequences of moving in that direction in today's far more globalized financial world could be unexpectedly destabilizing.

    I remain optimistic that we and our global trading partners will shun that path. The evidence is simply too compelling that our mutual interests are best served by promoting the free flow of goods and services among our increasingly flexible and dynamic market economies.

    Based on this last sentence it is clear that he is in favor of trade.

    Does he admonish the current administration's policies on trade?

    It is not explicitly clear whether or not he is in favor or against the current administrations's policies on trade. Based on what he said in the 2nd last paragraph, I would assume that he is against the administration's ideas regarding erecting tariffs in order to protect domestic jobs.

    What does he say about job movement overseas and labor costs.

    This is discussed in the third last paragraph. He is in favor of sending cheap labor to overseas markets. He continues on to say that if the US chose to erect tariffs and produce their goods domestically, then their standard of living would fall.

    Also note the following excerpt:

    jobs in the United States have been perceived as migrating abroad over the years, to low-wage Japan in the 1950s and 1960s, to low-wage Mexico in the 1990s, and most recently to low-wage China. Japan, of course, is no longer characterized by a low-wage workforce, and many in Mexico are now complaining of job losses to low-wage China.

    In developed countries, conceptual jobs, fostered by cutting-edge technologies, are occupying an ever-increasing share of the workforce and are gradually replacing work that requires manual skills. Those industries in which labor costs are a significant part of overall costs have been under greater competition from foreign producers with lower labor costs, adjusted for productivity.

    In recent years, competition from abroad has risen to a point at which developed countries' lowest skilled workers are being priced out of the global labor market.

    Please let me know if I was able to be of assistance.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 4:57 pm ad1c9bdddf>
    https://brainmass.com/economics/finance/summary-greenspans-opinion-trade-18606

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