Posted on 05/25/2008 11:08:40 PM PDT by JesseRichman
How to recapture the Republican advantage on trade
By Jesse Richman, Howard Richman, and Raymond Richman web posted May 26, 2008
When a new issue emerges that is popular, sometimes one party captures the issue and wins elections thereby. At other times no major party will adopt the issue and third parties emerge to champion it. Finally, some issues are dealt with by both parties.
The Democratic Party, but not the Republicans, began talking about trade in 2006 when Senator Chuck Schumer took leadership, both on the trade issue and in enlisting Democratic candidates who would make trade an issue. The result was that the Democrats recaptured the House and Senate in 2006. Trade has also been a major issue in each of the recent Democratic special election victories in formerly solid Republican districts.
Public opinion on trade has shifted decisively against current policies. Americans are increasingly concerned that current trade policies are not serving the interests of the U.S. economy. In an October 2007 Wall Street Journal/NBC News poll, 59 percent of Republicans agreed with the statement that
"Foreign trade has been bad for the U.S. economy, because imports from abroad have reduced demand for American-made goods, cost jobs here at home, and produced potentially unsafe products."
Enough of the 59 percent of Republicans who believe that foreign trade has been hurting the US economy are willing to vote on that basis that the party cannot afford to ignore them. People used to say that a conservative is a liberal who has been mugged. Many Republican voters are free traders who think their country is being mugged.
How has the mugging occurred? The Chinese government, the Japanese government, and others have been intentionally keeping trade unbalanced in order to steal our industries....
(Excerpt) Read more at enterstageright.com ...
It's always a good idea to take advice on economic policy from an assistant professor of political science, even when most economists reject his approach.
Yeah that Smoot-Hawley tarriff worked so well for the GOP. As I remember it led to years of GOP dominance in the White House and Congress....
And if we don’t encourage fair trade and force the Asians to end unfair trade practices we will can kiss Ohio goodbye this election and then you and the WSJ crowd can be lynched by Obama’s tax hikes.
But hey, at least we are importing cheap socks! ;)
Either we run on fair trade or we lose Ohio.
An Obama presidency will NOT be good for business.
If we do it too much it defeats the purpose of running in the first place, but it may be worth it to make a few compromises on trade. It's hard to say.
Big lobbyists in the USA, mostly in D.C, working BOTH PARTIES, and getting money from the Chinese, Japanese and others to keep THOSE markets closed to the products produced by US workers, have found their way into senior positions in the Obama, Clinton AND McCain campaigns.
The damned thing is rigged. Does anyone really expect Fair Trade to take center stage under the next Globalist US President, any way you toss the dice?
The arguments for “free trade” as espoused by the WSJ and others are little more than slogans and bumper stickers. The brutal truth is that we are shipping our low-skills jobs overseas while our government schools are turning out increasing numbers of low-skills workers. We are told that these job losses will be replaced by “better jobs” - presumably in high tech and international finance. Lots of luck to the South Carolina textile workers who have watched their looms loaded onto trains headed for Mexico.
If we don’t achieve something at least approaching “balanced trade,” we’ll lose not only Pennsylvania and Ohio but the Carolinas as well. And when we wake up to the fact that the electronic components of our “smart bombs” are made in China, well, it just may be too late.
Unfortunately neither party is accountable to the average citizen, only to the elites. Therefore, the electorate will not have a choice on these potentially defining issues.
For those who believe in our current system of free trade I submit the following:
1) American became a great industrial nation in the late 1800’s. During that time the cost of the federal government was funded primarily by tariffs. Our growing economy benefited from taxes on imports.
2) While the Smoot Hawley tariff was blamed in history books for the Great Depression of the 1930’s, imports when the bill was passed in 1930 represented less than 5% of GDP, exports also less than 5%. The real cause for the Great Depression was the significant contraction of the money supply by the Federal Reserve after the stock market crash in 1929.
3) In the 1950’s and 1960’s the US manufacturing sector grew rapidly, the US economy became the strongest in the world, and the US ran a large trade surplus under much more restrictive trade barriers than today. The strength of the manufacturing economy allowed a strong middle class to develop. The US prospered with trade barriers, with dropping of quotas and tariffs associated with “free trade” in the last quarter of the 20th Century we've seen the loss of entire industries and in the first quarter of the 21st Century are seeing real declines in the standard of living of many Americans.
4) The infrastructure in the USA is declining rapidly. Under “free” trade, imports do not pay a “fair” share of the cost of maintaining roads, bridges, ports, airports, waterways, and other infrastructure support trade. Were these real costs applied to the goods being imported, instead of the general tax fund, the cost of imported goods would reflect their true costs and the cost of internally manufactured products would be more competitive.
5) Other costs, primarily environmental and social costs, are not allocated to imports. We have moved production from “clean” US factories where workers have health and other benefits, to polluting third world factories where workers toil for subsistence wages often under brutal working conditions.
6) Our trading “partners” under the current free trade model, erect many non-tariff barriers to US imports. China in particular flagrantly refuses to protect intellectual property. It is an uneven playing field.
7) High tech and international finance jobs will follow economic growth. To blindly assume we will keep the jobs with high intellectual capital is foolish. As other economies surpass ours in productive capacity, they will also increase share of high value jobs in the same way the US did in the 1950’s and 1960’s. In my own industry, textiles and apparel, we saw the manufacturing jobs flee to Asia in the 1980’s and 1990’s. Now we see the high value design and planning jobs moving to Asia. It is faster and cheaper to design product near the factories than to maintain high cost design studios in Manhattan. Visit Fashion Institute of Technology in New York and look at the large number of Asian students in the classroom learning textile and apparel design. In 20 years they won't have to come to the US for training — the jobs will be over there and their universities will train the next generation of designers. This pattern will repeat for every industry where we've lost our manufacturing capability.
The value of the dollar is eroding rapidly because we produce less and less domestically every year of what people want to buy, either inside our borders or outside. Obama is correct, people want change. Unfortunately, neither side is offering change. 2006 should have been a wake-up call. Given an absence of choice, angry voters will vote against incumbents who have no agenda to promote. Trade and immigration are issues that resonate with average voters. Who has the courage to address these issues?
Duncan Hunter's position on a prudent middle ground on the trade issue is one reason I thought he was the best choice for president.
I agree with your analysis, and I’m glad you nailed Smoot Hawley as part of it. That tired old chestnut was used by Algore in his debate with Ross Perot, and is trotted out every time “free trade” comes up.
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