Skip to comments.Riding the free trade raft over the falls
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.
Come on, Racehorse, it isn't that difficult. Would Cuba benefit from trade with the US, or wouldn't it?
See # 87.
Since there is not much possibility of real free trade in today's world, there are going to be times when protectionism is appropriate. Probably not too many, but some. Also, in my very first reply to you, I noted the importance of national defense, I had meant to imply that there will probably always be at least a few industries that need to be kept local, thus protected.
Nevertheless, the concept of free trade is one with which I am comfortable, its opposite, Central Planning, with government deciding price and wage, and directing the econony, is one which I oppose on principle.
Incidentally, the herd animal tag line is a direct reference to the Democrat Pary's affinity with socialism and central planning. I am advocating the opposite, but if individual freedom and personal liberty were the characteristics of the herd, which they aren't, then I would count myself in.
And a skillful refutation of the facts from you, right?
you are confusing me. I can't tell which side of the free trade debate you are on.
OK, you have Karl Marx on your side. I have Adam Smith. I am a little surprised to find Marxist freepers, though.
Great Britain had PLENTY of places to which she could export machinery, equipment, and manufactured goods--they were called Colonies (Rhodesia, India, etc...)
Don't tell us that GB had 'noplace' to sell its goodies.
I recently had reason to browse through my aging copy of Smith's Wealth of Nations. With respect to tariffs and other protectionist intervention by government, if you were to do the same, you would find you are quite wrong. Now, with respect to other trade matters, he might smile on you just a wee bit.
Perhaps you've never heard of the Greens?
It is the Greenies who have shut down US lumber production, aided by Clinton. GWB has not been much help at all--if any--in recovery of the lumber industry.
Whether or not you or Pat ever choose to recognize the fact, tariffs do not penalize foreign producers. They are a hidden tax on the consumers of items so taxed.
Good going guy. Free trade shills refer to thousands of pages of government-to-government deals as 'free trade'. Lots of input from lobbyists and foreign governments but our elected reps can't change a sentence.
It is that difficult.
With whom are you proposing we do business? What is the measure of benefit?
Can you refute the facts cited by Buchanan? Or, do you prefer to remain in the land of theory?
At 30 cents/hour, a $8500.00 car only takes, ah, lemmeeesee heah, 28,333 hours--about 10 years' work--to pay off (excluding interest.)
That also excludes housing, food, clothing---JUST the car.
What GM is actually predicting is that the US market for GM cars will be gone by 2020. Thus, the Chinese market HAS to be bigger.
Ummm, Buchanan cited facts. Where have you refuted them?
"You place your right to buy anything at the lowest price above the right of American workers to have the highest standard of living. You are with the herd on this one."
What is the difference between making large wages and paying high prices and lower wages with cheap prices? If the purchasing power is the same, then introducing protctionist tarrifs to ensure high wages does nothing but increase government control and unnecessary meddling.
Your $4K computer (1985) would have cost you about $1K in 1990--and it was STILL made in the USA.
Since 1995, cost reductions have to do with slave labor, not manufacturing efficiencies--all of which were achieved in the USA before that date.
It is getting confusing, isn't it? I'm on his side and we're about to take a wrong turn. :-)
I am not proposing doing business with Cuba. I was asking a simple question: Would Cuba benefit from trade with the US?
What is the measure of benefit?
What is the measure used to decide the benefit China has enjoyed?
Quite the eye-opener, huh?
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