Ok, well there are just a few issues I would like to raise about tw's posts. It seems to me that in many of his posts, he raises the same issues or arguements in order to support his position. Tariffs, quotas, free trade, etc...
One that stuck out to me has been his "burgernomics", big mac index, and the economic concept known as "Purchasing Power Parity". For those who are unfamiliar with this, it is defined as "is an estimate of the exchange rate required to equalize the purchasing power of different currencies, given the prices of goods and services in the countries concerned. PPP exchange rates are used for a number of purposes, most notably to compare the standard of living of two or more countries. It is necessary because comparing the gross domestic products (GDP) using market exchange rates does not accurately measure differences in income and consumption."
tw assumes that, given you may buy a big mac in Mexico for $2.66 compared to $3.15 in the U.S., then Mexico would naturally be a superior place for companies to invest were it not for U.S. barriers to free trade. To use this as an example though, of why illegal immigration exists is not appropriate however. There are more forces at work here which influence the PPP between given countries. Yes, trade barriers are a part of what cause disparity in the PPP, however much more goes into it which both complicates and moots his point. For example, could not a big mac cost more here simply because we Americans demand more of them? From the law of supply and demand, we can tell that as demand rises, so does the cost. Maybe Mexicans demand less so the price reflects that. Also it is easy to say that the sum of the parts (of the big mac) given PPP should be the same across borders, but what about those things considered "non-traded goods", such as the cost of the service and preparation of the food, as well as the productivity of the workers at any given McDonalds across the globe. It seems that tw only introduces these topics to confuse and try and support his position, but a firm understanding of the concept actually works against that. So, for a better understanding, here is a research report put together by the Federal Reserve Bank of St. Louis on just this topic. I recommend the part starting on page 6, titled "Why does PPP fail?"
http://research.stlouisfed.org/publi...3/11/pakko.pdf
Now, he also refers much to GATT and the US failure to support it's side of NAFTA to promote free trade between the US and Mexico. First, it is a slow and tedious process to create a Free Trade Area, or FTA, and while we may not be there completely with Mexico, we are definately making progress. Since 1995, the WTO has received notification of more than 100 FTA's, more than double that which were formed under GATT between 1947 to 1995. tw would like you to believe that because the US subsidizes our agriculture industry, then we are in an unfair advantage over Mexico, however almost all developed countries, including Mexico, provide some sort of support towards their farmers. You may want to check out thier "PROCAMPRO" program, which is the only program in the region which provides direct cash to their farmers. Also, as of 2003, nearly 900,000 jobs have left the United States to either Mexico or Canada as a direct result of NAFTA. While it is true that NAFTA has created jobs in the US, the net effect is negative, namely because what NAFTA has done is do away with most of the barriers to trade between the US, Canada, and Mexico. You can read all about it here:
http://www.epinet.org/content.cfm/briefingpapers_bp147
And for anyone who thinks I'm just bullshitting to prove a point against tw, then here is the other sourse I used, primarily starting at page 9:
http://www.columbia.edu/~sr793/count.pdf
Sorry for the long post, but it is something that I felt that needed to be said.
