EDITORIAL: Misunderstanding free trade

Washington Times ^ | March 17, 2010 | Editorial staff

[raptor22]

President Obama finally spoke out in favor of "free" trade last week, though his version of free trade is one that only a mercantilist would recognize. Speaking at the Export-Import Bank's annual conference, Mr. Obama said an "obstacle that our exporters face is that the federal government frankly just hasn't done a good enough job advocating for them abroad." Like everything with this administration, you see, the private sector just needs more government intervention, and things will be all right.

In launching his National Export Initiative, Mr. Obama talked about the need to "marshal the full resources of the United States government" and announced that he "signed an executive order instructing the federal government to use every available federal resource" to push his central plan. Nothing was said about getting government out of the way of business because that's not his plan. Mr. Obama wants to double exports within the next five years by subsidizing exports by those companies the government deems worthy of subsidies. Obviously, shareholders and workers in some industries benefit from those subsidies while shareholders and workers in other industries bear the taxes that pay for the subsidies.

[mlocher]

Mr. Obama wants to double exports within the next five years by subsidizing exports by those companies the government deems worthy of subsidies.

Remember, Japan's problems started when their gov't subsidized chip makers. They never recovered, and it forced Intel to get very competitive very quickly. Here it comes in the US.

I wonder what businesses will be subsidized? T-Bonds?

[TitansAFC]

-—”.....Nothing was said about getting government out of the way of business because that’s not his plan....”-—

No, it is not.

That being said, and I know I’m going to take heat from some here for saying it, our current “Free” Trade agreements are not the product of putting America First.

[1rudeboy]

The government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
--Ronald Reagan

[expat_panama]

It’s what everyone’s been saying. A tariff is a tax, a subsidy is spending, and that means protectionists are tax’n’spenders.

[TitansAFC]

-—”A tariff is a tax, a subsidy is spending, and that means protectionists are tax’n’spenders.”-—

Umm......The founders taxed things with tariffs, and Reagan was perhaps the most protectionist President since Hoover when it came to actual practice (100% tax on Japanese electronics, steel tariffs, motocycle tariffs, threats of ‘protectionism’ to open up Korea, et al.). He was no tax-and-spend’r.

The current Free Trade agreements ensure that Americans will pay a higher tax than anyone else, no matter who we’re trading with. And other governments get to tax-and-spend us as a result.

Subsidies, however, are crap.

[mlocher]

Thanks for the memories. That was a great quote!

[1rudeboy]

Pretty amazing that “the most protectionist President since Hoover” came up with the idea for NAFTA.

[TitansAFC]

I suggest a read from a Rush and Conservative fav: The CATO institute:

http://www.cato.org/pubs/pas/pa107.html

Reagan already HAD a trade agreement with Canada and Mexico, but it had standards. The whole point of NAFTA was to thwart his original North American agreement, which would ultimately require REAL free trade, and standards. That wasn't nearly good enough for companies looking to outsource rapidly south of the border without fear of Reaganite retaliation.

There is no denying - absolutely NO denying - that Ronald Reagan was the most ‘protectionist’ President since Hoover. Even the CATO institute, and Buckley, have said as much.

There has been a real twisting of Reagan's ideas on trade by Free Traders these days. NAFTA and its like would have been OPPOSED by Reagan, if we are to measure his actual deeds while in office.

The “Free” trade of today is a sovereignty cancer, and is in the mold of Fiscal Libertarianism, not traditional Conservative or Originalist fiscal policy. It is “Free Trade” like Obamacare is “reform.”

[1rudeboy]

You cite to CATO, who claims Reagan was not "free trade" enough. That is a far cry from your claim that Reagan was the most protectionist since Hoover, and your revisionism about whatever agreements we had with Mexico and Canada at the time.

[TitansAFC]

It was not my claim that Reagan was the most protectionist President since Hoover, it was the CATO institute. Buckley and (I believe it was) George Will have said as much as well. The Wall Street Journal regularly lambasted him for being a “protectionist.” Milton Friedman wrote that the Reagan administration made “Smoot-Hawley look positively benign.”

From CATO: “If President Reagan has a devotion to free trade, it surely must be blind, because he has been off the mark most of the time. Only short memories and a refusal to believe one’s own eyes would account for the view that President Reagan is a free trader”........”If President Reagan has been trying to teach the American people that free trade is good, it is hard to imagine what an ideologically protectionist president would have said.”.......”This abominable record has moved many former trade specialists in the Reagan administration to criticize the administration they once worked for.”

Reagan's agreement eliminated all tariffs on U.S.-Canadian trade within ten years, with some ending in five years and others immediately. That's why it had to be replaced with NAFTA, which again allowed foreign countries to put taxes on us, whereas we would not tax them. It allows for the removal of any repercussions for outsourcing and moving industry to Third World nations. Reagan, as you can see from the list of his actions, fought persistently to protect Domestic industry from having to face such a disadvantage.

Other countries tax U.S. citizens, while we are not allowed to tax them. That was never Reagan's vision of Free Trade.

Did you even read the litany of “protectionist” acts Reagan took while President? It's a pretty damn big list of MAJOR acts. Reagan's view of Free Trade was Free Trade. He worked to open foreign markets while protecting American industry. Today's “Free” traders are all about outsourcing. Adam Smith's head would explode.

[1rudeboy]

You're talking nonsense. 1. If Reagan was satisfied with the protectionist policies the U.S. enjoyed vis-a-vis Canada and Mexico, then he would not have proposed free trade agreements with them in the first place. 2. NAFTA does not allow Canada and Mexico to "tax" us, while we cannot tax them. There are any number of trade disputes with those two countries, but nothing of the sort of your fabrication that NAFTA allows them to tax us, while we cannot tax them.

[TitansAFC]

-—”If Reagan was satisfied with the protectionist policies the U.S. enjoyed vis-a-vis Canada and Mexico, then he would not have proposed free trade agreements with them in the first place.”-—

He wasn’t, he wanted tariff-free trade on all sides, which is why he signed THAT agreement. But you cannot deny his whole record, which was quite protectionist.