I'm not jbor Doug

[Jane Sweet]

I regret that trade policy has been inextricably linked with
job creation. We often
 try to promote free trade on the mistaken ground, in my
judgment, that it will
 create jobs. The reason should be that it enhances
standards of living through the
 effects of competition on productivity. It is difficult to
find credible evidence that
 trade has affected the level of total employment in this
country over the long run.
 Indeed, in recent months we have experienced the widest
trade deficit in history
 with unemployment still close to record lows. 

Certainly, the distribution of jobs by industry is
influenced by international trade,
 but it is also affected by domestic trade. The relative
balance of supply and
 demand in a competitive market economy determines the mix
of employment.
 When exports fall or imports rise, domestic demand and
relative prices have
 invariably adjusted in the long run to leave total
employment generally unaffected.

Those who protest against "globalization" appear too often
to be self-designated
 representatives of developing country interests. For all
the reasons that I have
 cited earlier, these protests, however well intentioned,
are wrong-headed. In
 particular, it is essential to note that probably the best
single action that the
 industrial countries could actually take to alleviate the
terrible problem of poverty
 in many developing countries would be to open,
unilaterally, markets to imports
 from these countries. Such countries need more
globalization, not less. 



				--Fed Chairman Greenspan

Jane