Skip to comments.How Free Trade Is Killing Middle America
Posted on 01/24/2014 6:36:50 AM PST by 1rudeboy
“We’ve outsourced our manufacturing and much of our pollution, but some of it is blowing back across the Pacific to haunt us.”
So says University of California scientist Steve Davis. Smog from Chinese factories has already saturated cities like Beijing, where residents go about in surgical masks, and crossed the East China Sea to foul the air of Korea and Japan. Now China’s smog is coming to America’s West.
Among the pollutants wafting their way over the Pacific, says the Guardian, is black carbon, which is “linked to cancer, emphysema and heart and lung diseases,” and travels “huge distances on global winds known as ‘westerlies.’” Davis is one of a team of U.S. and Chinese researchers whose report has been published by the U.S. National Academy of Sciences. As the Chinese factories fouling Asia’s air arose to meet the demands of Western consumers, says Beijing, the West should help pay the cost of cleaning up their polluted and poisoned environment.
Seems that, despite the academic consensus that free trade is win-win for all, free trade is not free.
Great nations that have risen to global power by protecting their manufacturing, like Britain in the early 19th century, have begun their relative decline when they embraced free trade. Between 1870 and 1914, protectionist America and Germany both shoved Britain aside.
Since Y2K, China, which protects its industrial base by keeping its currency artificially cheap, has surged past Italy, Britain, France, Germany, and Japan to become the world’s second largest economy. And they are gaining steadily on us. Free trade appears to be the policy of fading nations.
Perhaps it is time for a profit and loss statement of its costs and benefits. Undeniably, free trade has been a bonanza for the top 1 percent and many among our top 10 percent. As U.S. manufacturers shut down scores of thousands of U.S. factories to finance new plants in Asia, their production costs plummeted. Wages and benefits for Asians were, and are still, but a fraction of those of American workers.
Health, safety, and environmental standards were in some cases almost nonexistent. The eight-story garment factory in Bangladesh that collapsed in April, killing 1,100 workers, mostly women, and injuring another 2,500, would never have passed a U.S. building inspection.
After having shifted production overseas and dramatically lowered costs, U.S. transnationals saw a surge in profits. These were used to push corporate salaries into the stratosphere, increase dividends to shareholders, and keep the Washington lobbyists working the Hill day and night for fast track and free trade. And the lifestyle of our corporate elites changed. Where their fathers walked sooty factory floors in smokestack towns in World War II, these masters of the universe fly Gulfstream Vs to Davos and Dubai to dine with titled Europeans, Saudi princes and Chinese billionaires.
These are America’s winners from free trade. The losers? Middle Americans. The average U.S. family has not seen a rise in real wages in 40 years. This is directly traceable to the loss of more than one-third of all U.S. manufacturing jobs. And that loss, that deindustrialization of America, is directly tied to the $10 trillion in trade deficits since Bush I. Writers who celebrate how U.S. imports have risen in this month or that year almost never mention the trade deficit for this month or that year. Perhaps that is because the United States has not run a trade surplus in four decades, whereas, in the first 70 years of the 20th century, we never ran a trade deficit. Trade surpluses add to GDP; trade deficits subtract from GDP.
And when in a company town the company closes the factory, the town often dies. And all the little satellite businessesbars, diners, food stores, pharmaciesthat rose around the factory, they die, too. The tombstones of countless dead towns across America should read: Killed by Free Trade. Tenured economists on college campuses call this “creative destruction.”
The stagnant wages of two generations of U.S. workers also help to explain the crisis of Social Security and Medicare. For, as workers’ wages fail to rise, or fall, so, too, do their contributions in payroll taxes. If, as Simpson-Bowles contends, our largest entitlement programs are heading for insolvency, free trade played a lead role in that American tragedy. And where is the liberal morality in passing laws to ensure U.S. workers a living wage and clean and safe conditions, and then, through fast track and free trade, signaling their bosses that they can evade these laws by shutting factories here, moving their plants to Asia, paying coolie wages, and subjecting Asian workers to conditions that would earn a U.S. industrialist a tour in Leavenworth?
Whatever happens from free trade is what should happen, free traders say. As Dr. Pangloss explained to Candide, whatever happens, happens for the best in this best of all possible worlds.
In 1985, Roger [Milliken] had come to the White House to persuade me to convince the president to sign a bill to slow the flood of textiles into the country. No way, I told Mr. Milliken. I'm the biggest free-trader in the building, except for the fellow down the hall, who was Ronald Reagan. Roger went away disappointed. Reagan vetoed the bill. And I supervised the writing of the veto message.
Within half a decade, however, some of us had seen the light and enlisted in Roger's crusade to preserve the manufacturing core of the country that he rightly saw as inextricably tied to the prosperity and the pre-eminence of the United States.
--Patrick J. Buchanan, Requiem For a Patriot, January 4, 2011.
If we want to bring manufacturing back to America we can only do it through regulatory and tax reform. (The core tea party tenets)
CHINA is on the RISE!
They don’t play by the rules set down...
They lowered their value of the Chinese currency so that their citizens can’t afford US products...
There are no rules of regulations on pollution control for food production or anything else - other than turning a profit...
Their military is increasing in size and war production...
We played with the devil on Bill Clinton’s urging...and we are paying the price...
The US doesn’t even have a show manufacture anymore - let alone a microwave, TV, or anything else that the typical consumer buys...soon the world will have a stamp on it, “Made in China”...
“The beneficiaries of free trade are many, and they don’t know who they are. It’s victims are few, and they know who they are.” Milton Friedman.
Well, one aspect of Free Trade is that while “Fruit of the Loom” left Oklahoma and other parts of the south, underwear is still very affordable.
The purpose of 'Free Trade' has always been to destroy the American Middle-class.
"Made in the USA" changed to "Made in Japan," which changed to "Made in China," which will change to "Made in India."
In the aggregate, this is a good thing for America and the world. As other nations become wealthier, they become customers for American products.
I do believe the coming Populist wave is going to include a resurgence of the Ross Perot “No More Free Trade!” position.
These are the same people so, enamoured of ‘free trade’, who try to force Kyoto-like agreements on the US, while demanding NOTHING as rigorous of other countries... themselves THE greatest polluters!
In 2007-08 Willard was urging trade with China and insisting that China be given favorite nation status...
Now, w/ the elevation of world wide standard of living, I believe that the American worker, coupled w/ American inventiveness, can once again be competitive.
There is a new economy coming, not based so much on mass production, but rather mass information.
There’s no such thing as “favorite nation” status. “Most favored nation” status (a term that creates a lot of confusion) means that the nation operates off of the standard tariff sheet. There are some exceptions for specific products, but that is a separate issue.
Well, it’s not like everybody woke up and suddenly decided to outsource Industry. Outsourced industry is a result of hostile business conditions that have systematically forced American Manufacturing to foreign (more importantly, less regulated and taxed) sources.
Chief among them are onerous EPA regulations, onerous Labor relations, high taxation and high cost of serviceable infrastructure. Mostly political reasons as higher government spending and associated costs just force higher and higher taxation.
Other reasons are now coming into play as our education system continues to dumb down the work force and make it even less competitive to foreign companies. This is egregious as it damages and erodes our future dominance or presence in global research.
We won’t educate our next generation properly and we’re too eager to educate foreign nationals that merely depart with the education and technology and contribute little to the U.S.
All this by design so that the rest of the world can catch up to western technological and living standards ostensibly for the greater global good — however only the U.S seems to be making this sacrifice (not that the sacrifice was a good idea anyway)
Then when you talk about and realize how IP, copyright and patent regulations are further crippling our competitiveness you start painting this picture that shows you how inept and inefficient liberal socialism is.
The left and the right continues to mortgage the future on all fronts of U.S Industry. They trade the more important competitiveness of tomorrow for the illusion of competitiveness of today just to maintain their constituency. Trading the future for today.
Now we should understand the saying: “A fish rots from the head down”.
Virtually every industrialized country, including us, have done the same thing: screwing asset holders to provide free capital.
The reason they push free trade on us is to keep inflation from going through the roof.
If everything were made in America again, no one using today’s dollars could afford to buy anything made in America.
Just look at the goods and services still produced in America—the cost of all have skyrocketed: healthcare, real estate, insurance, education, transportation, etc.