But you knew that.
Posted on 01/31/2004 2:47:00 PM PST by madeinchina
In his State of the Union message, President George W. Bush devoted only a single sentence to international trade: “My administration is promoting free and fair trade to open up new markets for America's entrepreneurs and manufacturers and farmers -- to create jobs for American workers.” With the country facing another record trade deficit around $500 billion, the dollar losing between 20 percent and 40 percent of its value against other major currencies in the past two years, and some 3 million jobs being lost in the manufacturing sector since 1997, the trade issue deserved much greater attention. Indeed, the Bush Administration had unveiled a new Manufacturing Strategy only days earlier. But failure to call for Congressional action to implement the new strategy enhanced perceptions that the White House was not really taking the issue seriously. Consider the use of the empty phrase “free and fair trade.” Not since the Portuguese inaugurated the modern global economy by shooting their way into the Indian Ocean to grab control of the Asian spice trade five centuries ago, has anyone been successful by an adherence to “free and fair trade.” Instead, they have played to win by using every advantage they could find or create. No one wants a “level playing field” if they can gain a “home field advantage” tilted in their favor. Indiana University professor William R. Thompson has spent his career analyzing international competition in all its forms. He has found that “waves of political leadership, order and large-sale violence [are] closely linked to processes of long-term economic growth.” Yet, he has observed that among too many analysts and policymakers “this set of activities remains underappreciated despite its close links to some of the most vicious wars of the past half-millennium and the political-economic restructuring that occurred in the midst and the aftermath of these contests.” This lack of interest is certainly evident among top U.S. decision makers. The idea that trade should be “free” of government involvement or simply made “fair” without concern for the outcome, implies that either trade is of too little consequence to require state supervision – a clearly disingenuous and thus untenable position, or that private “market” results will automatically provide the best outcome for society. It is this last notion about a benevolent “invisible hand” that has paralyzed U.S. policy. It is the wishful thinking of liberalism masquerading as theology. It has two basic tenets. First, the world is basically a harmonious place where conflict can be avoided by a mutually beneficial division of labor that integrates the world. Second, the division of labor can best be managed by private enterprise pursuing its own ends without being held accountable for any larger consequences. The noted realist thinker E. H. Carr demolished the harmony thesis by observing that the division of labor seldom creates a world of equals. Instead, there are “haves” and “have nots” or as foreign policy experts denote them, “satisfied” and “unsatisfied” powers, with the latter group bent on overturning the status quo in order to improve their place in the world. This unequal division is revealed in the classic example used by David Ricardo to teach the principle of comparative advantage: the cloth-wine trade between England and Portugal. In this example, the Portuguese should accept England’s lead in the industrial revolution, which in Ricardo’s day was best represented by the mass production of textile goods, and be content to export wine to pay for imported manufactured items. Portugal should not seek to industrialize itself to compete with England. This lesson quickly earned the title “free trade imperialism” as it would condemn Portugal, or any non-industrial society, to subservience. It should be recalled that one reason the American colonies revolted against England was that they did not like their assigned place in the imperial division of labor. The independent United States became an industrial competitor of the British Empire and eventually surpassed it. Reports from the recent World Economic Forum held in Davos, Switzerland indicate that a host of powers are working in the same way to undermine America’s economic leadership and overthrow its status as the only global superpower. Zhu Min, general manager and economic adviser at the Bank of China, predicted his country will become the main challenger to U.S. economic power, surpassing Japan to become the world’s second largest economy by 2020. Russian Finance Minister Alexei Kudrin said his country “has economic potential comparable with the United States.” Brazil is also making a bid. It led the block of developing nations in opposition to the U.S. agenda, bringing to an impasse the Doha Round World Trade Organization talks. Under left-wing president Luiz Inacio Lula da Silva, Brazil is forging closer ties with China. And India’s leaders are very sensitive to any implication that they are not keeping up with the ambitions of the other rising nation-states. Thompson’s research shows that “commercial challenges are aimed immediately at the leading commercial power.” In today’s case, that means the rich American market is the target, and domestic American firms are to be swept away in the struggle for economic dominance. Private firms are unable to meet this challenge on their own. Domestic American firms cannot stand against overseas rivals backed by their governments, who use all the tools and tactics learned from centuries of trade warfare. Many of the largest “American” firms in leading industries now see themselves as being “transnational” and owing no allegiance to the United States. This means they have been easy converts to the mercantile strategies of the rising states. Washington needs to take action to rein in these global mercenaries and channel their energies back to the advancement of American economic preeminence. In his study The Emergence of the Global Political Economy, Thompson warns of the cost of inaction: “If the declining leader’s deteriorating position accelerates due to its own choices, perceived vulnerability will increase and so, too, will the scope of the challenger’s attack.”
Those two concepts, free trade and fair trade, seem to be at odds with one another. Wonder how they can both be promoted at the same time? Isn't it a bit like seving two masters?
The ones that pay better than Wal-Mart & McDonald's.
It truly is a race to the bottom.
One theory I have as to why so much illegal labor is being allowed in is because that is another way of competing with the cheap, foreign labor. By providing it for corporations here in the states they may be less apt to move or be undercutted by foreign competitors.
The government now realizes that because of current globalist policies we run the risk of losing too many employers necessary to fund the government. Letting them have their cheap labor is better than them moving out or going bankrupt.
So where does that leave the American citizen? Basically competing for minimum wage jobs.
Can you cite one place on earth where there is free trade? How is it that the global economy is working without the type of free trade you advocate?
That's exactly right. But the free traders act as if that was never the case and any thought of returning to those policies would be socialistic and anti-freedom.
False. Big Auto has entire departments devoted to calculating "domestic content," and it is domestic content that determines whether or not an auto gets a "Made in U.S.A." label.
First of all you can look at sarcasm's post #13. Would you care to dispute that? Can you post data that demonstrates real wages are increasing? And not from a government site as you've done in the past.
As any capitalist will tell you, the final step in the transition to a truly capitalist society is the abolition of all taxation. To say that corporations need to pay their "fair share" is getting it backwards--the individuals need to pay less.
Ok, you think that it's unfair that corporations can deduct operating expenses, but individuals can't deduct living expenses? Fine--the answer isn't to change the tax code to disallow a deduction for operating expenses, but to change the tax code that allows for deduction of living expenses.
I don't agree with Bush on much. In fact, this is the only issue on which I agree with Bush--but he is dead on, 100% right. My only concern with the Bush administration on this subject is that I wish it would concentrate less on bi and tri-lateral trade deals, and concentrate more on multi-lateral trade advancement. I'd like to see the Bush administration push hard to advance the Doha round--which would include eliminating farm subsidies--and really get some meaningful relief in the realm of world trade. I think since the Doha round collapsed last Sept., Bush has shown some surprising interest in reviving the talks, so perhaps there is promise.
"That's exactly right. But the free traders act as if that was never the case and any thought of returning to those policies would be socialistic and anti-freedom."
I noticed many of those who don't understand this are too young to have voted for Reagan. They seem to be the brain-washed product of our liberal academia which pervades the economics department as well as other college departments.
Now Communist China has purchased some of our loans and we are now caught up in a precarious and fragile market.
Of course, Communist China still gets OPIC and Ex-Im Bank funding (compliments of the American taxpayer) for any business setting up within their borders. And, the government there automatically owns half of every business within China's borders.
That Communist China still imprisons Christians for being Christian and uses forced prison labor doesn't seem to bother anyone in the Bush administration, or any of the free-traitors here.
Sometimes I feel like I'm the only one who remembers which government fully backed which side of the Korean War and the Vietnam War.
But you knew that.
It's not whether we should have free trade, its whether we should have free-er trade. Certainly you understand my post where I explained it's degrees of evil??
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.