Skip to comments.Free Trade Cheats American
Posted on 01/23/2013 7:24:00 AM PST by Kaslin
The re-election of Barack Obama hasn't done anything to make more jobs available to Americans, and there is no indication that it will. America now has 23 million people who want a full-time job but can't find one.
Obama doesn't think American citizens or businessmen create jobs. His Jobs Czar, Jeffrey Immelt, recently said on a television interview referring to China, where he has outsourced General Electric's light bulb plants, "state-run Communism may not be your cup of tea, but their government works."
In his first presidential debate last year, Obama claimed that passage of free trade agreements with South Korea, Panama and Columbia would create U.S. jobs because they would double our exports and promote his goal of "a seamless regional economy." One year after Congress passed these trade deals, exports to Korea have declined by more than $1.2 billion in comparison to the same months the year before, while imports have risen.
The official U.S. International Trade Commission admits that the Korea agreement will cause significant job losses, not just in low-end industries but also make a victim of the electronic equipment manufacturing industry. The Economic Policy Institute, a leftist think tank, estimates the Korea agreement will cost us 159,000 more jobs over the next five years.
The trade pact's 1,000 pages of rules and regulations will be enforced by foreign tribunals. Ron Paul calls this "a sneaky form of international preemptions, undermining the critical checks and balances and freedoms established by the U.S. Constitution."
Our annual trade deficit with China has increased to $290 billion. Our exports to China were up 6.4 percent over the previous year, but imports increased by 6.5 percent.
In 2002, we granted Communist China Permanent Normal Trade Relations (PNTR), which is a fancy name for free trade, and the United States has lost an average of 50,000 manufacturing jobs a month ever since. U.S. employment dropped 2.6 percent because of a combination of outsourcing and absence of job growth that would have taken place without the trade agreement, according to a new study by the Federal Reserve's Justin Pierce and Yale's Peter Schott.
Mainstream economists have been stuck for years in the notion that any attack on "free trade" is heretical, but finally their dogma is cracking. Even the Washington Post now acknowledges that "trade liberalization" with China is a big reason for the decline of U.S. manufacturing jobs.
Forbes Magazine published an article titled "America's Manufacturing Crisis: Finally Harvard Gets It." What academics finally "get" is that it is, indeed, a disaster for America to lose our manufacturing base specifically because that causes us to lose our "ability to innovate."
The theorists held onto their out-of-date free-trade theory despite the loss of millions of outsourced jobs, despite 42,000 U.S. factories permanently closed, and despite the loss of high blue-collar wages that could support a family. But our loss of innovation is finally waking them up.
Most people recognize that America's prosperity and high standard of living depend on our remarkable power and skill of innovation produced by manufacturing. They should read Alexander Hamilton's great 1791 treatise on the importance of manufacturing.
Harvard management professors Gary P. Pisano and Willy C. Shih emphasize the effect on innovation in their new book "Producing Prosperity: Why America Needs a Manufacturing Renaissance." Another useful book is "Freedom's Forge" by Arthur Herman, which proves that a manufacturing base is essential for national security, and we couldn't have won World War II without it.
Our manufacturing base was what enabled the "arsenal of democracy" in 1944 to produce a war plane every five minutes, 150 tons of steel every hour and eight aircraft carriers a month. After World War II, our manufacturing base caused an incredible rise in our standard of living, bringing electricity and indoor plumbing to most homes and good wages that built a middle class to enable blue-collar workers to support a fulltime homemaker to raise their children.
We've been told that the new normal is for America to be an economy based on providing services instead of products. The trouble is it's pretty hard to export services such as waiters and dry cleaners; we can only export things we make.
The main defect with free trade is that, in the words of the old cliche, it takes two to tango. America steps naively onto the dance floor, but Communist China won't dance.
China protects and subsidizes its home industries and products, forces foreign-owned plants to give China their patents and trade secrets, cheats us with shoddy and dangerous exports, manipulates its currency to keep it artificially low, operates a large network of technology spies in the United States and pays slave-labor wages to its workers.
Protectionism cheats Americans. Free trade merely puts us in our place.
You are right.
And it will be interesting to see which Freepers agree with Schafly, and disagree with Reagan (and Palin, and Levin, and Sowell, and Williams, etc) on this economic issue.
Many will. Sad.
Oh, while I’m at it, Milton Friedman also gives a brilliantly simple disseration on how free trade allows for incredible efficiency in the markets, benefitting all consumers, and promoting peace among countries - while protectionism raises the cost of everything, reduces the efficiency of everything, and promotes bad feelings among countries.
Milton Friedman 4 Phyllis 0
There aren’t any easy or pat answers about foreign economic policy. Each has risks and costs, as well as benefits.
But the union phenomenon, for whatever good it may once have done, has now run amok and shoots America in the foot. Things are driven overseas that never needed to be.
“manipulates its currency”
Don’t you love it when they throw that in? “What’s a ‘federal reserve system’? Never heard of it.”
Trade can be believed to promote world peace as long as one assumes everyone has their price in terms of messes of pottage.
Reality is that this is not always true! And money itself is an amoral thing, a tool that can be used to do good or evil. And once actually idolized (a step in the spiritual dimension, into which economics can have no insight) it definitely becomes a root of all kinds of evils.
Wait, since when were we talking about love of money? Since when is free trade in closer contact with the evil which lurks in men’s hearts than protectionism? Certainly the political means of earning a living, i.e. stealing, is more prone to greedy exploitation than earning a living through trade.
Isn’t the point of this article that protectionism would materially benefit us? So it’s a technical question, not God against Mammon.
Throw in the coming amnesty, continued global wage arbitrage and other obvious patterns of change.
The American worker will continue to have debasement of salary and will enjoying the fruits of cheap bling. The discussion in the future will be the enjoyment of cheap trinkets or the necessities of having a job.
That group of voters who pulled the lever for Ross Perot has never really gone away (and in some areas of the country I think it’s grown).
We can debate the merits, but this sort of economic populism would be a way out of the woods for the GOP.
Since the bible was written, that’s when? This is a modern essay into a very, very old question. The bible should not be treated as the newcomer here.
There ain’t no such thing as a free lunch. The price we pay in increased social spending, crime, and taxes as a result of “free” trade must be one we are willing to pay.
Exporting our jobs means that the engine that drove American prosperity is shut down. Those that used to be able to support a family, buy a house, send their kids to college, now can’t. Many of the ills we here on Free Republic complain about (welfare, the housing crisis, the trillion dollar college loan racket, etc.) can be traced to “free” trade.
Don’t get me wrong, I think free trade is the right way to go, but we have to be willing to pay the price.
Those are hardly the result if free trade. Those are political decisions made outside the market and according to different principles.
I have no idea what you mean.
You Free Traders must love Socialism because that’s where it leads.
The country is short 20 Million jobs. People who can’t find a job have to eat and their kids have to have medicine. Your kidding yourself if you think otherwise. Its much better to find jobs for these people.
See how aggressive China is getting. There military is being built on the back of Free Trade.
How expensive do you think WWW3 will be?
The so-called “free trade” currently destroying America is a deliberately constructed one-way mess primarily with COMMUNIST China.
China in no way is liberalizing itself. It is just taking over.
America continues to support this, as the part of the total we receive gets smaller, and smaller, and smaller.
We need a new way.
Not sure exactly how to improve things, but what we have not isn’t it.
Know hoe I know free trade didn’t cause those problems? The solutions popped up before the engine of prosperity was shut down in the manner of which you speak. Back then they blamed free trade, too, among other things. It was the poor farmers, left behind in a cruel new world of largescale manufacturing. There was a Welfare State, then, before free trade was allowed to grind us down as you imagine happening now.
Know how I know free trade didn’t cause those problems? The solutions popped up before the engine of prosperity was shut down in the manner of which you speak. Back then they blamed free trade, too, among other things. It was the poor farmers, left behind in a cruel new world of largescale manufacturing. There was a Welfare State, then, before free trade was allowed to grind us down as you imagine happening now.
Ah, there’s the war drums, right on schedule. Whivh system was it, again, that was more conducive to peace? I’m guessing not the side that begrudges another country getting richer lest it diminish our chances in the war which they assume is inevitable.
Increased welfare spending because we can’t let those that had their jobs exported starve. Increased social stress causing safety concerns because there are no jobs and some feel that crime is their only option. There is no principle that stands alone. Every action causes other things to take place. Pay $1 less for a t-shirt and then pay $1 more in taxes. Enrich the Chinese. I guess those are the sort of decisions that should have been discussed.