Posted on 03/17/2009 10:53:35 AM PDT by mnehring
The International Brotherhood of Teamsters hailed the end of the road for the trucking program, and issued a sharp rebuke of Mexico’s retaliatory action Monday. “The right response from Mexico would be to make sure its drivers and trucks are safe enough to use our highways without endangering our drivers,” Teamsters President James Hoffa said.
and a Democratic senator also said:
A long-time critic of the program, Sen. Byron Dorgan (D., N.D.) said he would work with the Obama administration to address the safety concerns. “I have said all along that I have no problem with Mexican long-haul trucks being allowed into the United States if it can be done safely,” he said.
Faithfully adhering to the script written two decades ago, Democrats, Teamsters and anti-free traders all continue to display their allegiance to a tired and decrepit ideology conservatives and libertarians have fought for generations to bury. The spectacular success of global trade over the last twenty plus years has raised the standard of living for people around the world and brought a level of wealth to America earlier generations would find astonishing.
Yesterday, the outstanding economist, Russell Roberts, of George Mason University, linked again to the investigative analysis he wrote in this month eight years ago. He notes regretfully, it is still relevant today:
What’s really going on?
There’s someone missing from this picture. We have the Mexican truckers. We have the U.S. truckers who have to compete with the lower-wage Mexicans. And we have the Americans who are concerned about safety. We have the seen. But some of the participants are unseen.
Let’s look at the economics. Under the 1995 order issued by President Clinton, Mexican trucks were allowed to cross the border but had to stay within designated commercial zones. These zones were within 20 miles north of the border. After that, the Mexican trucks had to transfer their goods to American trucking firms. (You might wonder how you enforce a law like that, but more on that later. For now, let’s assume that the Mexicans complied with the law.) So up until now, Mexican goods had to make their way across America on American trucks. Now, Mexican trucks can continue to St. Louis and San Francisco and Houston with their Mexican-produced goods. What are the effects of this change?
Roberts covers the safety charges made by many:
Just enter “Mexican truck safety” into your favorite search engine and you’ll find plenty of info. You can find anti-NAFTA sites that tell you how dangerous Mexican trucks are. You can find pro-NAFTA sites that tell you how it’s a non-issue. (There are a lot more of the former than the latter. Why is that? Do the antis have a better case than the pros? Or do the antis have a large vested interest in spreading the word while the pros have a smaller stake?) Most of it’s pretty self-interested. So take it with a grain of salt, just as you should take any dose of policy analysis.
and this:
Of the Mexican trucks stopped north of the border but within the four border states, 32% of the trucks were found to have serious safety violations and were taken out of service. But outside the border states, the rate fell to a mere 19%. This is lower than the U.S. failure rate of 25% found among trucks stopped within the U.S. for road-side inspections.
I highly recommend reading Robert’s analysis of various data regarding the safety of Mexican trucks, the possible economic effects and his revealing what Frederic Bastiat called the seen and the unseen in economics.
After formal negotiations begun in 1990, a majority vote of Republicans in Congress saw passage of the North American Free Trade Agreement in 1993, creating the second largest free trade bloc in the world measured by combined GDP. The treaty was born under a Republican regime and eventually ratified and signed into law by a Democratic president. The hard economic realities are irrefutable concerning the benefits of NAFTA to the three member nations.
The Obama administration has angered the Mexican government by violating a provision of a treaty we agreed to and ratified nearly sixteen years ago. There are many issues on which the Mexican government can be justifiably criticized, but not this one. America has spent all these years breaking one promise after another in violating compliance with one of the most important treaties ever signed by this nation.
Trade wars have very often resembled barroom brawls beginning with one man punching another who then hits a bystander who then slugs an onlooker without warning. They have a way of spiraling quickly out of control and culminate in everyone in the room suffering terribly. It is time now for America to live up to her obligations, cease coddling industries and unions while stoking protectionist fears around the world by displaying our fecklessness. The current precarious state of global markets does not need the lack of confidence and fear of retaliation generated by the USA arbitrarily breaking its word. This country, our neighbors and allies across the globe need now, more than ever, strong and steady leadership and that begins first with keeping our word.
As a final reminder of the repercussions government stupidity can have on the lives of citizens, I quote this historical column by financial writer Brian Trumbore:
The business reality of Smoot-Hawley was far worse. 1,028 economists had earlier petitioned President Hoover to veto the bill, but with enactment, tariffs hit all-time levels on some 70 agricultural products and 900 manufactured items. The economists had warned that S-H would raise prices to consumers, damage export trade, hurt farmers, promote inefficiency and promote foreign reprisals. As to the issue of increased prices, you saw in a piece I did two weeks ago that consumer prices actually collapsed in the years 1930-32, a point that we will come back to.
As for foreign reprisals, nations were outraged. Historian Richard Hofstadter called the tariff act, “a virtual declaration of economic war on the rest of the world.” Within two years, 25 countries had retaliated and U.S. foreign trade took a huge hit. America had exported $5.24 billion in goods in 1929 and by 1932, the total was just $1.6 billion.
Free trade greatly expands the government by forcing millions out of good paying jobs and turning them into dependent citizen...needing health care, food stamps and even housing...the more unemployed people depend on the government, the more control the government will have...take it to the bank...not Citi of course.
Is that why we have fewer jobs than we did before NAFTA?
Protectionism expands government, allows government to pick winners and losers and increases costs for Americans.
Reducing government power over trade reduces government power. Increasing government power over trade increases government power. That's simple enough for even a liberal like you to understand.
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