Dchand writes in his post tonight on the Blue Dog Blog
http://www.bluedogdemocrat.org/blog , "free trade is good for everyone, period." Yeah, right. America had a trade deficit of 725.76 billion during 2005 in no small part due to free trade policies.
First of all, let me explain where I am coming from in terms of basic values. Unlike many politically correct Democrats and big business Republicans, I am a nationalist. I regard myself as an American first rather than a "citizen of the world." I can understand why "citizens of the world" especially of the wealthier variety might favor free trade. But I can't fathom how any working or middle class American could support our current trade policies which have led to a loss of jobs and income stagnation for the low and middle end of wage scale in America.
The proponents of free trade always paint a picture that is all or nothing - wide open trade with no protection for critical industries or no international trade whatsoever. This is a false choice. Trade that flows both ways and is reasonably balanced benefits everyone. The reality is that trade agreements which fail to incorporate labor and environmental standards place American workers at a tremdendous competitive disadvantage. Since the U.S. entered into NAFTA, GAAT and the WTO, jobs paying a living wage have been leaving America at a unprecented rate. Of course, we were all supposed to get good paying, high-tech jobs to replace the old manufacturing jobs, but since it has been learned that even the computer jobs can be moved overseas. A lot of the same folks who think free trade is the best thing since sliced bread also love outsourcing which threatens the livelihoods of America's office workers and even skilled professionals.
Our current trade deficit is simply not sustainable. Warren Buffett has called the trade deficit America's greatest economic problem even more critical than the national debt.Buffett has proposed a system of import-export certificates which would bring trade into balance.http://tinyurl.com/m23dg Yes, Buffett's proposal amounts to a tariff and there is absolutely nothing wrong with tariffs. At one time, tariffs were the primary source of revenue for the federal government.
Yes, international trade is desirable but not wide open free trade policies which have created a massive trade deficit. It is critical that America continues to have a steel industry, automobile industry and that we can make our defense components if nothing more than to protect our national security interests. Sure, it's great that Kia is building a plant in Georgia but the jobs created by this Korean company are a drop in the bucket compared to the jobs lost through free trade. And the profits go to back to Korea rather than staying in America.
Americans across the political spectrum are becoming disillusioned with free trade. The DLC favors free trade because their big money contributors want such policies. I like the DLC position on some issues but definitely have to part company with them on the issue of trade.
In my view, it has been a disaster for Democrats to embrace the "Republican lite" free trade agenda. Bill Clinton helped Democrats lose Congress in 1994 by his support of free trade treaties which basically told working class Americans to drop dead. A lot of these voters became aligned with the Republican Party on the basis of social values as they recognized neither party would uphold their economic interests. Democrats need to support fair trade and economic nationalism.
Tuesday, March 14, 2006
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3 comments:
Any cursory reading of an Econ 101 textbook will disprove all arguments you posit here.
If we are keeping jobs here in America for any reason, we are diminishing our and the world's benefit. One must ask why we are so keen on maintaining a national steel industry or automobile manufacturing plants or domestic food crops. National security, a point you raise, is intriguing, but a red herring. The reason companies, and in fact consumers, elect many things foreign is because they are better, cheaper, and more in tune with Demand. American automobile plants are obsolete, as far as technology and human capital. If American workers are not able to compete with international wage differentials or education differences, then shame on Americans. Do you buy American for American sake? Or do you buy Honda because the car is so well-manufactured and cheaper? I buy Honda.
I will post more on this later.
The Republicans have suceeded in messing up the budget so severly it may cause our economy to unravel. It is cheaper to vote against republicans than to raise taxes. If you are interested in more about the debt visit my site it has a lot of great resources. http://payyourshare.blogspot.com/
The dollar, as predicted is being crushed. We are now at Par with the Canadian Dollar, the Loonie as it is called. This was all so predictable. You cannot run an 800 bilion dollar trade deficit and have your currency in demand. We have a lot farther to fall. Within 5 years from 2008 we should see the Canadian Dollar worth 25 % more than the U.S. dollar. The Euro at 1.40 now, should move to near 2.50, as China buys more and more of the Euro.
The pound at 2.04 as I write this will be near 3.00. Be ready for CHINA. When they finally let their currency float it will appreciate 70% over a 36 month period. The US trade deficit will be cut in half and then some by 2020.
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