Monday, January 7, 2008

Mobility of Capital or Mobility of People

Dr. Mankiw always has little posers that I suppose he thinks make his points, as do we all.

Here is one.

1. A firm decides to build a $100 million plant in China to make toys there, for import to the USA.
2. Another firm decides to build a $100 million plant in Detroit and bring the Chinese workers to the USA, instead.

The GOP funsters appear to love the first, scaled to almost any degree and irrespective of the communist character of the Chinese government; but they also appear to hate the second, with conservative think-tanks often putting out papers that "demonstrate" that importing workers lowers real wages, a conclusion that they use to bolster what appears to the casual observer to be natural, anti-immigrant sentiments.

Perhaps Paul Krugman's article will have some insights to this political conundrum on the Right, too.

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