Posted on 04/18/2005 6:37:40 AM PDT by A. Pole
These are not the halcyon days of the Republicans' champion of open borders and free trade, Jack Kemp.
The "Minutemen," who appeared in Cochise County, Ariz., April 1 to highlight the invasion President Bush will not halt, are being hailed by conservative media and congressmen as patriots, as they are dismissed by the president as "irrational vigilantes."
Comes now the trade shocker for February. The deficit hit an all-time monthly record: $61 billion. The annual U.S. trade deficit is now running at $717 billion, $100 billion above the 2004 record.
Smelling political capital, Hillary Clinton and Chuck Schumer are co-sponsoring a 27 percent tariff on goods from China. Beijing ran a $162 billion trade surplus with us in 2004 in what trade expert Charles McMillion calls "The World's Most Unequal Trading Relationship."
The waters are rising around the Kemp Republicans. For these gargantuan deficits are sinking the dollar, denuding us of industry and increasing our dependence on imports for the components of our weapons, the necessities of our national life and the $2 billion in borrowed money we need daily now – to continue consuming beyond our capacity to pay.
Brother Kemp is correct in his Washington Times column in saying Beijing has not been manipulating its currency. China fixed the value of the renminbi at eight to the dollar in 1994, just as we once tied the dollar to gold. Beijing rightly objects, "It is not our fault your dollar is sinking."
But here, the free-traders enter a cul de sac. They recoil at tariffs like Lucifer from holy water, but have no idea how to stop the hemorrhaging of jobs, technology, factories and dollars, except exhortation and prayer. For as 19th-century liberals, they believe free trade is "God's Diplomacy." Whoever rejects it sins in the heart. True believers all, they will ride this raft right over the falls and take us with them. This unyielding belief in the salvific power of free trade is, like socialism, one of modernity's secular religions.
As Kemp's column testifies, these folks are as light on history as they are long on ideology. Kemp claims "there is no demonstrable instance in economic history where nations were made worse off by free and open trade. There are only the doomsday scenarios spun out of the imagination of half-baked economists ..."
But between 1860 and 1914, Great Britain, which began the era with an economy twice the size of ours, ended it with an economy not half the size of ours. Britain worshipped at the altar of free trade, while America practiced protectionism from Lincoln to McKinley to Teddy Roosevelt to Taft. Tariffs averaged 40 percent and U.S. growth 4 percent a year for 50 years.
Bismarckian Germany did not exist in 1860. But by 1914, by imitating protectionist America, she had an economy larger than Great Britain's. Were it not for protectionist America shipping free-trade Britain the necessities of national survival from 1914 to 1917, Britain would have lost the war to Germany, so great was her dependence on imports. A real-life "doomsday scenario," thanks to a few dozen German U-boats.
Jack Kemp notwithstanding, protectionism has been behind the rise of every great power in modern history: Great Britain under the Acts of Navigation up to 1850, the America of 1860 to 1914, Germany from 1870 to 1914, Japan from 1950 to 1990 and China, which has grown at 9 percent a year for a decade. As China demonstrates, it is a mistake to assume free trade, or even democracy, is indispensable to growth.
Kemp trots out Smoot-Hawley, the 1930 tariff law, for a ritual scourging, suggesting it caused the Depression. But this, too, is hoary myth. In the 1940s and 1950s, schoolchildren and college students were indoctrinated in such nonsense by FDR-worshipping teachers whose life's vocation was to discredit the tariff hikes and tax cuts of Harding and Coolidge that led to the most spectacular growth in U.S. history – 7 percent a year in the Roaring Twenties. Under high-tariff Harding-Coolidge, the feds' tax take shrank to 3 percent of GNP.
As high tariffs and low or no income taxes made the GOP America's Party from 1860 to 1932, the Wilsonianism of Bush I and Bush II – open borders, free trade, wars for global democracy – has destroyed the Nixon-Reagan New Majority that used to give the GOP 49-state landslides. Bush carried 31 states in his re-election bid. He would have lost had Democrats capitalized on the free-trade folly that put in play, until the final hours, the indispensable Republican state of Ohio.
Kemp calls China our trade partner – surely a polite way to describe a regime that persecutes Catholics, brutalizes dissidents, targets 600 rockets on Taiwan, lets North Korea use its bases to ship missile and nuclear technology to anti-American regimes, and refuses to denounce racist riots designed to intimidate our Japanese allies.
As some on the Old Right have said since Bush I succeeded Reagan, open borders, free-trade globalism and wars for democracy are not conservatism, but its antithesis. And they will drown the GOP.
The Republicans jumping off the raft into the river and swimming desperately for shore testify to it more eloquently than words.
You mean, the quality of life as in what is offered by America's largest employer (outside of the government) WalMart?
In reality, this article proposes lowering the purchase power of Americans, therefore harming our citizens in every day life.
In reality, this article demonstrates the failures of free trade, not theory, as in your reality.
If there is such a connection between the trade deficit and employment, why is the unemployment rate not affected?
There is a connection between free trade and employment. Protectionists argue that free trade lowers the standard of living. Low unemployment demonstrates what everyone knows already, American workers are the best in the world and are willing to work three jobs to prove it.
Karl Marx was also a strong believer in a graduated (or progressive) income tax.
I know. That's one reason that I'm in favor of a national retail sales tax, or a flat tax, or practically anything other than the mess we have now.
"You mean, the quality of life as in what is offered by America's largest employer (outside of the government) WalMart?"
Exactly how is this a poor quality of life?
"In reality, this article demonstrates the failures of free trade, not theory, as in your reality.
Are you honestly claiming that by making products cost more, via adding a tarrif, that spending power is not reduced? If a product costs more, then we have to earn more to purchase that product, as a result quality of live is harmed, a direct harm to the citizens of the country charging the tariffs. That is not theory, regardless of your inability to understand it.
"There is a connection between free trade and employment. Protectionists argue that free trade lowers the standard of living. Low unemployment demonstrates what everyone knows already, American workers are the best in the world and are willing to work three jobs to prove it."
Unproven claims rarely are convincing.
>>"When the U.S. dollar declines against the Euro, the Chinese yuan declines against the Euro even if there is nothing in the Chinese economy that would otherwise cause such a decline."<<
China has complete control over the Yuan, it's their decision to peg or unpeg. The devaluation of the Yuan versus the Euro, because it's pegged to the dropping dollar, is again a boon to China - making its products even more competitive in the European market. And in a double whammy to European companies, because of the dollar drop - thus yuan drop - versus the Euro, China will now buy more from the US than from the Europeans, since the Dollar-Yuan rate remains unchanged. Europeans here in Shanghai are hoppin' mad about it.
Under these circumstances, why would China want to unpeg the yuan from the dollar?
The freedom of people in China is not my main concern. The ability of the United States to produce its own steel, ships, machine tools, microchips, and aircraft parts is. As I said, my primary objection to unlimited free trade is the damage done to our economic and national security by the loss of our manufacturing base.
The reason Cuba is still enslaved has nothing to do with trade policy and everything to do with Fidel Castro and his cronies. Dispose of them and Cuba's vibrant and creative people will make the country bloom. Likewise, as for the people of China, the only way they will ever be free is if the national socialist government in Beijing is destroyed. The best thing we could do for the Chinese people would be to pop off a nuke over Beijing and remove the taskmasters that dominate them. I fail to see how our lining the pockets of the Chinese military/industrial complex that keeps said government afloat promotes their freedom. Instead, we should arm ourselves against the Chinese government and force them to bankrupt themselves trying to match our military might. It worked with the USSR.
Even a blind hog occasionally roots up an acorn.
I don't disagree with the above. As I noted a couple posts ago, it's academic to talk about free trade as if it actually existed. It can only exist when both sides are "free." So, I am not as passionate about free trade as I am about the free market, for that pragamatic reason.
But as far as the concept of the free market goes, yes, I am passionately in favor. And the free trade concept too, by extension.
In other words, we can make sure we have a free market, we cannot do the same as easily with trade.
I usually don't agree with Buchanan.
I don't recognize the validity of the above statement. If there were one government, and it was one dedicated to freedom, one can imagine that it would allow a free market. OTOH, if it were operated as are most of the world's governments, it would be the opposite, based at some level on Central Planning.
Democrats don't understand the dynamic impact of taxes on the economy, either, so it must not happen.
How do tariffs enacted by congress in the US fall under your definition of central planning for world government? I thought tariffs were isolationist, protectionist? (In fact, they are and that is what is good about them.)
Democrats aren't the only herd animals.
First published in French as a pamphlet at the beginning of February 1848
Signed: Karl Marx {end}
Your acorn. You are actually comfortable agreeing with Marx, while professing to disagree?
Be clear; tell us that free trade with Cuba would not tranform Cuba. Come on, say it.
With all due respect, the free traders do have an answer. "Let em eat rice cakes." :-)
Absolutely and positively correct! Well stated!
Timing's interesting, eh? Tomorrow is Patriots' Day.
Ride to the sound of the guns!!!
Most of them don't even think there is a problem.
Marx was right. So was Perot. So is Buchanan. We have history and facts to prove it, yet you cling to your globalist trade theory like a liberal clings to taxes.
Adam Smith would regard the Bush Trade Doctrine as a 'how-to' manual for running a house of prostitution. Bush & Co., of course, are the madams.
It's your sons and daughters who actually are getting scre*&^ without any kisses...
I might say it.
With whom in Cuba will we be conducting this free trade?
I don't blame you for ignoring the facts in Buchanan's article.
Well, we're still waiting for the RedChinese consumer marketplace to emerge.
Might take another 50-100 years, but THEN the US will prosper, right?
Except by 50 years out, the knowledge of tool and die making will have completely evaporated in the US.
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