Free trade? C'mon

Tooling and Production ^ | Jan 08 | Brian Sullivan

[null and void]

January 2008

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an executive view

Free trade? C'mon

 By Brian Sullivan

We should rename "free trade." Because it isn't free and it isn't fair. Since it's trade that's regulated in favor of multinational special-interest groups, why don't we call it for what it is: rigged market trade?

Why are we so afraid to call a spade a spade? There are 36,000 fewer U.S. factories than there were eight years ago. One in five manufacturing jobs has been lost nationally in the last 10 years.

If we don't stem the tide of multinationalism through trade law reform, then between 42 million and 56 million of the 140 million U.S. jobs could be moved off-shore within 20 years, including all 14 million current jobs in manufacturing. We'll be left without any manufacturing, which is at the core of our country's national security.

Members of the Tooling, Manufacturing & Technologies Association (TMTA) wonder if things will change in time. They know that most of their woes emanate from disastrous trade laws written in Washington DC.

When the concept of free trade was thought up, did the corporate-controlled multinationalists anticipate that America would cease to be a land of broadly shared prosperity? What's happened to the concept of social morality? It's been thrown out the window.

Corporate greed feeds on itself and U.S. manufacturing suffers. In Collapse: How Societies Choose to Succeed or Fail, social anthropologist Jared Diamond, describes an American society in which "corporate elites cocoon themselves in gated communities guarded by private security, fly in corporate aircraft, depend on golden parachutes and private pensions, and send their children to prohibitively expensive private schools. Gradually these corporate elites lose their motivation to support the police force, the municipal water supply, Social Security, and public schools. Any society contains a built-in blueprint for failure if corporate elites insulate themselves from the consequences of their own actions."

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Most of manufacturing's problems, your problems, my problems, are as a result of bad trade laws.

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I suppose there are some reading this who believe this article is leaning a little to the left. Actually, it's not. Increasingly, trade policy and the effects of multinationalism are not partisan issues. The signs of broadening resistance to globalization and a fraying of Republican orthodoxy on the economy have been reported on page-one in The Wall Street Journal. The morally shameful I-don't-care-about-you-because-I've-got-mine mentality exhibited by Congress and this administration is a national disgrace. Our representatives and legislators, collectively, have been responsible for trade policy that has resulted in a cave-in of the manufacturing industry.

At the end of the day, there's only one way there's going to be any relief for all of us in manufacturing, and that's through Washington, D.C. Most of manufacturing's problems, your problems, my problems, are as a result of bad trade laws. When the grassroots electorate becomes engaged in this fight, we'll change bad free-trade laws into good fair-trade laws that will reflect the interests of small manufacturers who've been absent from trade policy deliberations far too long.

We need fair-trade reform, and we need it now. The first thing that should happen is to freeze all new trade agreements, especially by this current administration, until major pro-domestic producer and worker trade strategies are put in place.

Congress must create a National Trade Commission. Congress must pass currency manipulation legislation. Congress must address the unfair advantage caused by the rebate of value-added taxes by passing a border equalization tax. Congress has to enact countervailing duty laws. Congress has to pass laws that standardize Rules of Origin. It has to pass laws that address infrastructure imbalances including regulatory standards and enforcement standards.

In this general election cycle now, we have the real opportunity to make change. Politicians are up for election or re-election. The Tooling, Manufacturing & Technologies Association (TMTA) has aligned itself with other organizations such as the Organization for Competitive Markets and the Coalition for a Prosperous America, like-minded groups that are actually holding politicians' feet to the fire relative to trade reform issues.

In the last election cycle held two years ago, 15 politicians who were manufacturing-unfriendly and electorally vulnerable were targeted for defeat.

The "kill rate" was 15 out of 15.

Brian Sullivan is director of sales, marketing, and communications for the Tooling, Manufacturing & Technologies Association. His e-mail is brian@thetmta.com.

[Bishop_Malachi]

Gentlemen, have you not learned by now that we should insulate our poor, one-dimensional, talentless and imbecilic manufacturing-laborers from competition? So what if 350 million American consumers are hurt everytime we coddle some special-interest labor group. Those people are entitled to those jobs! Do you hear me?...entitled! Moreover, they are entitled to jobs that pay well above the actual market-value of their labor...with benefits too! How can this not be obvious!?!

And don’t even get me started about how this ties into national security. Why, our government has absolutely no clue that they are tipping off the Chinese (and everyone else for that matter) about our most intimate and secret weapons-technologies. Why, one day we’re going to wake up and find that we can’t even produce a missile without some foreign country taking control of it -in mid air- by a secret remote control device they’ve created. How can you not see?!?!

Ok, I’m sarcasmed out...gotta go.

[null and void]

If you are still a protectionist when you get done, let me know.

I think the point you are missing is that the policies put in place by the US goverment are protectionist TO FOREIGN companies.

IOW, OUR laws protect THEIR industries NOT OUR OWN!

[scarface367]

It's called inflation.

If that is the case, what is the current inflation rate and is it higher or lower than has historically been the case?

[roamer_1]

Right, because competition is evil. Wouldn't want to actually increase the choices consumers have now would we?

Competition is great, providing that it is fair, and providing that the products are apples for apples. Increasing the choices to consumers by financing the war machine of our enemies is as ludicrous as it comes.

[null and void]

Yes, comrade we must take from the rich and redistribute the wealth. Then we will all be living in a worker’s paradise.

With respect, what in the Hell are you talking about?

[null and void]

Inflation has pretty much been uniformly positive since the 1930s.

Using non-inflation adjusted dollars will ultimately put us all in the top tax bracket.

This is why I am confedent that I will get back every single penny I have put into Social “Security” in the past 4 decades.

Of course, by then a hamburger might cost $1999.99, still, I’ll get every penny...

[hedgetrimmer]

Yes, comrade we must take from the rich and redistribute the wealth.

Have you ever read any of the materials from the WTO and our state department, USTR and trade agreements. THEY ALL talk about "rich countries" giving competative advantage to "poor countries". That marxism is BUILT INTO "free trade".

The redistribution of wealth is occuring in the global 'secretariats' (read global governing agencies) and in the trade tribunals. The communists do not oppose "free trade" because it is making them extrodinarily wealthy, and does nothing to remove them from their dictatorships and give anyone in a 'poor country' freedom.

[airborne]

Where do you draw the line?

Is there anything that’s not for sale to the least expensive supplier?

[Bishop_Malachi]

Marxism can never be “built into free trade”. Free trade involves private individuals (with property rights) selling their land and/or labor and/or capital...freely. Free trade will not REINFORCE communism. Quite the opposite. It will serve to tear it down. Marx had it backwards. Individual rights and free-markets will highlight the great internal contradictions of communism.

[dljordan]

“The morally shameful I-don’t-care-about-you-because-I’ve-got-mine mentality exhibited by Congress and this administration is a national disgrace.”

True words. I’m sorry in advance for the beating you’re going to take.

[scarface367]

But is inflation higher or lower than has historically been the case?

Inflation has pretty much been uniformly positive since the 1930s.

Would it have been better if it was negative?

[null and void]

True words. I’m sorry in advance for the beating you’re going to take.

It's been surprisingly mild.

Are FReepers losing their touch?

[scarface367]

Competition is great, providing that it is fair, and providing that the products are apples for apples.

So we need the government to step in and decide what's fair then?

[roamer_1]

If instead those plants would not make profits at all, then you might find it hard to just go do it. But in that case, it is not greed on the part of capitalists that is responsible for plants shutting down, but actual competition and the real economic costs involved. And the article's charges are slanderous nonsense.

No one is denying the real economic costs involved, nor is it entirely a matter of corporate greed, though that greed is certainly a factor, you must admit. Many things are done by our government that oppose our industries and stifle our businesses, which has been calamitous as well.

Take the taxation of inventory as an example- Business used to roll it's profits into inventory to escape being taxed at the end of the year. Since the capital was invested, but the return was not realized, inventory stock brought the money across into the new year, where it would then be sold to turn the part back into capital.

But the government caused inventory to be taxed starting in the late 70's in order to close the loophole. What came from that is a double taxation, as the part was taxed as inventory, and then taxed as profit when it was sold.

What evolved from that was an inevitable and drastic reduction of inventory, and the invention of an horrible system called JIT ("Just in Time") manufacturing, where the part was made when ordered.

This, in and of itself is bad enough, but when tied to planned obsolescence schemes, it forces profit where none was before, by ensuring the consumer would have to buy a whole new unit when a breakdown occurred, as there were no parts in stock, and the new product's parts no longer fit the old (often on purpose).

So you see, while the example began as a regulation on the part of the government, and can be directly attributed as such, business also became culpable and found an advantage by which it could infinitely redouble it's profit- much to the dismay of the consumer.

[null and void]

Would it have been better if it was negative?

Realistically? It doesn't make a pinch of s#!+'s worth of difference what the inflation/deflation rate is, as long as one is active in the economy.

Prices go up, wages go up. Prices go down, wages go down.

Where it does make a difference is when some fixed dollar amount is used as the standard for judging economic success. A fixed poverty line, or arbitrary earnings level to be upper class end up having little to do with one's comfort level or purchasing power.

I think the definitions we use for poor, middle and upper class are fatally flawed in their underpinnings. We sort by "wealth" as if it can be measured by little bits of printed paper, or hordes of ones and zeros in a bank's computer.

There are really only two classes:

People who earn their living by the sweat of their brow, and
People who live on the labor of others.

Note that the last group includes the richest and the poorest among us. The poorest live on transfer payments, money seized from those who earned it and given to those who didn't. The richest, by organizing and paying others to do the labor, and taking their due from the a part of the value they add by enabling their employees (or the people they invested in) to make a better living.

[null and void]

So we need the government to step in and decide what's fair then?

No, we need the government that has decided that penalizing American manufacturers is fair to stop deciding what is fair!

[roamer_1]

So we need the government to step in and decide what's fair then?

Better our own than some UN or WTO tribunal.

[null and void]

Did you note that hedgetrimmer put "free trade" in "quotes"?

You do know that such use of quotation marks is the punctuational equivalent of saying SO-CALLED free trade, don't you?

[scarface367]

Sorry, reality is that deflation in much more dangerous to the economy than inflation. Our economy would be much better with 2% inflation than 2% deflation. Get back to me once you understand basic macroeconomics.

The richest, by organizing and paying others to do the labor, and taking their due from the a part of the value they add by enabling their employees (or the people they invested in) to make a better living.

Wow, Marx would be proud.

[scarface367]

Because government control of the economy works so well doesn’t it? Screw freedom of choice, the government will know what’s best.