Posted on 08/05/2016 7:02:35 AM PDT by 1rudeboy
Ronald Reagan was an advocate of free trade throughout his presidency. But just like today, many Americans in the 1980s opposed free trade and pushed for measures that would keep the nation out of the global economy.
Fortunately, Reagan argued persuasively in support of trade, and his success led to rapid growth in the U.S. economy.
He knew that protectionist policies might benefit some industries, but they hurt others.
When the government gets involved in trade, special interests get a chance to game the system. These groups excel at making it hard to tell how their policies harm Americans.
In his 1987 economic report, Reagan explained how protectionism hurts consumers:
Whatever the motive, protection in any form redistributes income and wealth. And because the redistributive effects are usually not readily apparent, special interest groups sometimes favor and governments often choose these methods over other more visible and much less costly forms of subsidy. Protection raises the price of imports and domestically produced import-competing products.
Reagan realized that history provides many examples of the damage unfree trade policies can do.
Speaking to the nation in the summer of 1983, he reminded Americans that the United States has gone down the road of protectionism beforewith disastrous results. He said:
One economic lesson of the 1930s is protectionism increases international tensions. We bought less from our trading partners, but then they bought less from us. Economic growth dried up. World trade contracted by over 60 percent, and we had the Great Depression. Young Americans soon followed the American flag into World War II.
Free trade has the opposite effect, which Reagan knew well. Speaking at a reception in Tokyo on Nov. 10, 1983, he succinctly summarized his philosophy on trade, stating:
The message I want to leave with everyone here tonight is simple. It’s a lesson history has taught us again and again. Protectionism hurts everyone, but free trade benefits all.
Ronald Reagan was right about trade, and the exceptional economic growth during his presidency provides proof.
Research conducted by The Heritage Foundation shows a clear correlation between low trade barriers and economic prosperity. Today, we must remember that free trade leads to more prosperity for all, while protectionism hurts American consumers and producers.
That's what I thought would happen. Send them a few factories their ancillary economy would improve and there would be less incentive for people to come to the United States.
That didn't happen. So you have to kind of rethink why you want NAFTA now? Any reason Reagan may have had is long since gone and disproven at this point. It didn't work the way Reagan said, it worked more the way H. Ross Perot said.
I believe in Free Trade, but not “Free Trade Uber Alles”. There should always be recourse.
Would you rather bring the U.S. economy to Ross Perot’s level? Think carefully before you answer.
“Fair trade”
A term only used by the far left up until 2 years ago.
The article says the truth but there is information that is not included that should have been. Namly, the US does not now have free trade. The US discounts our trade to importers. It is cheaper here to sell than anywhere in the world, in effect the US subsidizes imports. Before you get mad and call me crazy understand a couple of things. US Manufacturers have to pay up to 39% of their profits as taxes, that is over 1/3rd of the profit is lost. The US requires manufacturers to conform to many, many regulations that are costly and require added employees to deal with it.
Importers don’t have to deal with either of these things. Some countries have business that is wholy owned by the government so that they don’t pay taxes and in many cases have few if any environmental concerns. On top of that instead of welfare they just assign citizens to work in said factory at a low salary. They avoid the cost of welfare and we support their workers who work for a company that pays no taxes but gives all the profits to the government because the government owns the factory. In the US about 70% of every dollar taxed goes to transfer payments, welfare and Social Security. I know there is a special tax for Social Security but the government spent that a log time ago and now the money comes out of the general fund.
I would ask why we would make our companies conform to regulations and then discount purchasing to companies outiside the US who don’t. It is foolish. It is a prescription for failure and it is working wonderfully.
In Japan importers have to comply with all the same regulations in the manufacturing process that the domestic companies do, that is why we don’t sell beef or cars there. Their beef is way more expensive there but mostly because the government forces the growers to conform to a ton of regulations.
I think Japan does it right. Why hamstring domestic and discount imports?
We need to fix it. I think Trump understands this and will.
If “Free Trade” needs 20,000+ pages of treaties and regulations, it ain’t very free.
I see that argument a lot, and wonder—why do strategic arms treaties have so many pages? I mean, if they do, then they are not very “limiting.” Get my drift?
Reagan needed to use a little more “trust, but verify” on his own party as well as on the Soviets.
What exactly is "Ross Perot's level"? Seems to me that Ross did very well for himself.
Higher prices, fewer jobs.
Sounds like your kind of protection!!!
If auto manufactures are in collusion to price fix then that is illegal and needs to be investigated. Price fixing is very illegal.
Collusion?
If the Feds put a $10,000 tariff on every imported car, what happens to the demand for and price of domestic cars? Why?
My point (lost upon you) is that the U.S. economy is far larger than it was when Perot was speaking of that sucking noise.
We must pay higher prices. Make America great again!
It's what happens after that is what's important.
Yup. Everyone riding bicycles to work, just like in China.
Unfortunately, they rarely, if ever, seem to point the finger at the staggering taxes, overwhelming regulation and continuous litigation that drives American businesses overseas. I'm not sure why that is but it appears they see bigger government as the solution rather than being the problem, as Reagan did.
Thanks for posting...
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