The Surprising Reason Your Car Was Made in Mexico

More than its low labor costs, Mexico is attracting car manufacturers away from the U.S. because it has free trade agreements with more than 40 countries.

How the EU is Like a Dysfunctional Family

Like a dysfunctional family with members who dislike each other, the EU stays together because of the benefits of David Ricardo’s comparative advantage.

Six Areas Where Economists Disagree With Everyone Else

A small firestorm ignited when the Chair of the President’s Council of Economic Advisers said, “Outsourcing is a growing phenomenon, but it’s something that we should realize is probably a plus for the economy in the long run.” Hearing the comment…

The Real Mother of Invention

Saying that profit, not necessity is the mother of invention, economic historian John Steele Gordon starts his column in this week’s Barrons. His focus was the 18th century clipper ships that earned people like John Jacob Astor $50,000 for a single voyage…

Chinese Imports

Are you paying more for your clothing? According to NY Times financial journalist Floyd Norris, women’s shirt prices, dresses, sweaters, all that government statisticians consider female “outerwear,” have started to become more expensive. Meanwhile, the women’s “underwear” category reflects a…

The Fabric of Free Trade

The roof of the big-box store near your home could contain fabric that was made in Greensboro, N.C. Transported in rolls that are 12 feet wide and 5,000 yards long, this material is also made in South Korea. Until now,…

Trade Deals

What if Mr. Jones, an assembly line worker, lost his job because of low cost imports? And, what if Mrs. Smith, a travel agent, also is unemployed but the reason is online firms like Expedia?  Princeton economist Uwe Reinhardt asks…

Free Trade

KORUS has been in the news. The Korea-U.S. Free Trade Agreement, negotiated in 2007 but not ratified by Congress, was in trouble. One reason was Ford. With a 1% share of the South Korean car market, U.S. automakers want more.…

Pleasing Ricardo

During the 1990s, ignoring the protests of horrified Italian cheesemakers, the US placed a tariff on Pecorino cheese. The reason was bananas. Favoring their former colonies, the EU taxed bananas coming from all other Latin American countries that were grown…

Ranking China

Look at your dining table or your clothing and you might see “Made in China”. Thinking of all they are producing, a market economy might come to mind. Next, though, take a look at the Index of Economic Freedom at:…