Krauthammer: A ‘no’ to free trade is a ‘yes’ to China

The Albuquerque Journal ^ | May 15, 2015 | Dr. Charles Krauthammer

[2ndDivisionVet]

That free trade is advantageous to both sides is the rarest of political propositions – provable, indeed mathematically. David Ricardo did so in 1817.

The Law of Comparative Advantage has held up nicely for 198 years.

Nor is this abstract theory. We’ve lived it. The free-trade regime created after World War II precipitated the most astonishing advance of global welfare and prosperity the world has ever seen.

And that regime was created, overseen, guaranteed and presided over by the United States.

That era might be coming to a close, however, as Democratic congressional opposition to free trade continues to grow.

On Tuesday, every Democrat in the Senate (but one) voted to block trade promotion – aka fast-track – authority for President Obama, which would have given him the power to conclude the Trans-Pacific Partnership (TPP), a trade deal being hammered out with 11 other countries, including such key allies as Japan, Australia and Singapore.

Fast-track authority allows an administration to negotiate the details of a trade agreement and then come to Congress for a non-amendable up-or-down vote.

In various forms, that has been granted to every president since Franklin Roosevelt. For good reason. If the complex, detailed horse trading that is required to nail down an agreement is carried out in the open – especially with multiple parties – the deal never gets done.

Like all modern presidents, Obama wants a deal. But he has utterly failed to bring his party along.

It’s not just because for six years he’s treated all of Congress with disdain and prefers insult to argument when confronted with opposition, this time from Democrats like Elizabeth Warren. It’s also because he’s expended practically no political capital on the issue. He says it’s a top priority. Has he given even a single televised address?(continued)

[Cringing Negativism Network]

You are saying to me, it doesn’t matter that we run massive trade deficits?

You are actually saying that?

[impimp]

Yes.

[Leaning Right]

That free trade is advantageous to both sides is the rarest of political propositions – provable, indeed mathematically. David Ricardo did so in 1817.

I am extremely suspicious of mathematical "proofs" that involve human-related variables. And that's because such proofs always assume that humans will make optimal decisions. But humans are not robots.

As an example, sometimes a leader will choose a less than optimal economic outcome in return for, say, a political advantage. And since the proof did not take politics into account, the proof falls apart.

[impimp]

https://www.lewrockwell.com/2010/11/walter-e-williams/trade-deficits-are-irrelevant/

Protectionists and others (perhaps the ignorant) worry about trade deficits but ignore the capital account surplus that is created.

[MortMan]

He cannot know. Because the provisions of the bill are secret (WTH?), Dr. K cannot possibly know whether refusing to pass it is better or worse than the status quo.

The bill may be fine and dandy, but I know that what this admin does in secret is often anathema to a free people.

[Cringing Negativism Network]

You are completely wrong.

Economists are wrong, as a bunch of eggheads who cannot grasp simple truth.

America is strong when we support American companies. When Americans spend American money on imports, they are sending our money to that foreign country, which makes the other country richer and makes America poorer.

We are now over 18 trillion dollars in the hole, that is rapidly getting worse, yet you are going to say with a straight face this is meaningless.

Our problem is as a country, we have a bunch of nitwits in charge.

Americans need jobs.

Someone needs to support Americans jobs once again.

Right now.

[MortMan]

For me, the fact it must be ultra secret is the problem itself. Whenever any administration (much less this one) gets secretive, I worry for my wallet and my safety.

Why is this secret treaty acceptable, yet most (if not all) of us worry about the Iran deal?

I haven’t even seen the Morris column about TPP.

[impimp]

Well - I estimate that 50% of Freepers agree with me and 50% of Freepers agree with you. We are all conservatives and want a stronger US, but we will not agree on this issue even if we agree on everything else.

[Alberta's Child]

We are now over 18 trillion dollars in the hole, that is rapidly getting worse, yet you are going to say with a straight face this is meaningless.

This has nothing to do with the trade deficit, except in one very important respect: Foreign governments and investors who end up with a surplus of U.S. dollars are financing this massive national debt. This means two things: (1) they obviously have some confidence in the U.S. that some folks here don't seem to have, and (2) they have a vested interest in seeing the U.S. succeed.

[TexasFreeper2009]

Um... no.

Free trade benefited us after WW2 because WE were the ones making everything!!!!

I dont care what some deluded flag waiver who believes American workers can do it better than anyone in the world says, the simple fact is American worker CANT compete against slave labor in other countries. That's just a fact.

[Cringing Negativism Network]

I sort of agree, with one big exception:

My big problem is, ALL of our politicians at the moment, seem to agree with you.

I don’t see anyone, anywhere on the political scene, saying Americans need to support American workers once again.

Not one person. Anywhere.

[RC one]

We have a $342 billion trade deficit with China because the playing field isn’t level and because we have scumbag politicians that are selling us out to the highest bidders. We shouldn’t be trying to make the playing field level by lowering our standard of living to that of the ChiCom slave. We really shouldn’t elect politicians that accept “donations” from foreign governments and corporations in exchange for influence over our policies. oh, and we definitely shouldn’t trust Obama with fast track authority over one of the largest trade agreements in the world. Pretty sure we shouldn’t trust him period.

[logi_cal869]

Yep.

I find it interesting that the ‘free trade’ parrots seem awfully silent on this one.

[Theoria]

In these FTA's where is the legislative body? They merely vote up or down on the passage, is not the purpose of Congress to heed the needs and wishes of the commons and put in 'legislation' for them? Where is our input and priorities? It seems, the only input is by lobbyist and special interest. How does one petition for such interest by the commons?

The handmaidens of free trade tend to be academics who wear the ring of tenure. Followed, by different orders of elites who's finincanical and interest benefit by such decisions.

[odawg]

You need to factor into the equation that American manufacturing is being moved overseas to take advantage of cheap labor, and illiterate hordes are being move in here to destroy what is left. How is that just due to the flow of natural forces? There is no natural law that requires that a country impoverish itself to accomplish a disastrous goal such as free trade, when it is not free trade, but economic suicide. Alexander Hamilton was a great proponent of protective tariffs for American manufacturing. Americans can never compete with the low wages in China, for example, (l out of 4 people on Earth is Chinese). Whatever kind of work you do, it can be accomplished much cheaper by someone overseas.

[khelus]

Re:That free trade is advantageous to both sides is the rarest of political propositions – provable, indeed mathematically. David Ricardo did so in 1817.

I am extremely suspicious of mathematical "proofs" that involve human-related variables. And that's because such proofs always assume that humans will make optimal decisions. But humans are not robots.

As an example, sometimes a leader will choose a less than optimal economic outcome in return for, say, a political advantage. And since the proof did not take politics into account, the proof falls apart.

Krauthammer is a shill for the citizen of the world who run global finance and corporations.

Richardo mathematatically 'proved' no such thing as Krauthammer claims.

Krauthammer neglects to mention that Ricardo himself admits that 'comparative advantage' only works for things that are fixed geographically, such as climate, mineral deposits, etc' He assumes that capital and labor will not cross borders i.e. he assumes that capital will not pursue cheap labor in another country.

Per Ricardo:
"..........
The difference in this respect, between a single country and many, is easily accounted for, by considering the difficulty with which capital moves from one country to another, to seek a more profitable employment, and the activity with which it invariably passes from one province to another in the same country.
..................
It would undoubtedly be advantageous to the capitalists of England, and to the consumers in both countries, that under such circumstances, the wine and the cloth should both be made in Portugal, and therefore that the capital and labour of England employed in making cloth, should be removed to Portugal for that purpose
...............
Experience, however, shews, that the fancied or real insecurity of capital, when not under the immediate control of its owner, together with the natural disinclination which every man has to quit the country of his birth and connexions, and intrust himself with all his habits fixed, to a strange government and new laws, check the emigration of capital. These feelings, which I should be sorry to see weakened, induce most men of property to be satisfied with a low rate of profits in their own country, rather than seek a more advantageous employment for their wealth in foreign nations.”

Additionally Ricardo's work grew out of Smith's Wealth of Nation' which is based upon an economy consisting of samall owner run businesses.

[arthurus]

Definitely. We shouldn't even be talking about playing fields because that connotes "fairness." Fairness is controlled and hampered trade. What we need is one sided- our side- fee trade. We can't have free trade, or we can't get any good out of, it so long as we tax hell out of our own businesses and suffocate them with regulation and requirements. Government interference should go no farther than the Constitutional mandate for guaranteeing weights and measures, and by extension of that, perhaps, truth in advertising. If we did that then the restrictions placed on business and trade by other countries would make us richer as it would chase investment to America. Cheapening the money to make one's country "more competitive" is a world class fool's game. The only trade restriction justified really is a uniform tariff for the purpose of raising revenue for the government but only if there is no income tax or national sales tax.

[Leaning Right]

Interesting. Thanks.

[goodnesswins]

Yes...what you said....if it has to be that secret there’s something wrong with it....

[central_va]

...Until your town’s factory is closed( a hightly profitable factory more than not) your children impoverished and have to move around looking for work and unemployment goes thru the roof.