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Posted on 08/06/2013 3:56:41 PM PDT by DannyTN
With currencies pegged or propped, there’s no international free trade. Before we stop seeing balance of payment deficits, the dollar will fall much. If that doesn’t happen, we’ll see a general default situation completed.
Thanks for posting. This was very interesting. Many on here are already aware of a lot of the things Streitz mentioned...but Streitz is able to put it together in one thoroughly researched piece.
I am sure the Free Trade supporters will share their spin/trolling about this article, but, one thing they can never do...prove that Free Trade works. They cannot
You cannot create wealth by redistributing it...
Actually Singapore and Hong Kong do not have a lot of industry...small land area limits such
Both make their wealth on banking and investments....low taxes and strong banking laws make them safe places for finance. Same can be said for Luxembourg, Liechtenstein, Cayman Islands, and some other places
Thanks for playing.
/johnny
Let me get this straight Kodak vs Fuji is an example of the downside of free trade? The guy starts starts this example by explaining that the US government encouraged Fuji to compete against Kodak. How in Sam Hill is that an example of free trade?
From the article: “Instead, U.S. trade policy encouraged Japan to enter the market with Fuji Film to compete against Kodak. The free trade idea was to let both companies compete in Japan and United States and this would produce the best result for consumers.
In the Untied States, Fuji Film has reached a market share of about 30% of the United States film market. It is consistently priced about 20% lower than Kodak’s main line of film. Kodak does not have a brand in the economy sector of the film market, and by law, it is barred from producing its own private label. (An example of how U.S. monopoly laws work against U.S. firms, even those facing foreign competition.)”
Can someone please explain the free trade angle on this example? Free means free means no government interference.
As soon as one of our homegrown companies gets large enough to dominate the world our government beats them down. As soon as we are on a path of dominating the world in the production of fuel energy our government squashes coal, nuclear, oil, and now its is doing is best to start killing gas. As soon as a business starts getting rich they get visits from the EPA, OSHA, FTC, EEOC, and the IRS.
Free trade should it ever be tried is not the problem.
Streitz then goes on to cite NAFTA and GATT as further deficiency with free trade. Again I ask what do those examples have to do with free trade? Free means free which means I do not need a 100,000 page document explaining what I may or may not do. Freedom is the absence of laws.
Streitz is signing onto massive government control in hopes of solving government inflicted problems. One example...say socks. A company makes socks so in order to protect them all imported socks are banned or taxed into oblivion. The sock company is now a monopolist maybe it gets a competitor or two but they all have to buy domestically grown cotton...right? So as with all government enforced cartels we will have unions and high prices and some very rich cotton farmers.
Are we going to tax ourselves on imported oil? What about sugar? Should we keep protecting it from competition so that we can finish decimating US confectionery industry?
But hey I am sure Obama would be glad to manage what is left of free economy. He can set the tariffs, decide who gets exemption, and for damn sure he will be glad to make sure everyone pays the worlds highest corporate tax rates. Oh yeah and he is just the man to protect the “WELFARE” of the us worker. God knows all of those greedy rich business owners who buy stuff over there (like sugar and steel and oil and rubber and coffee) to sell or make into goods here are not looking out for the worker.
Man the barricades comrade,
How many times are we going to hear the Smoot Hawley lie? Pure Free Trade Propaganda.
“Smoot-Hawley Caused The Great Depression” has to be one of the biggest lies told...along the lines of “George Zimmerman stalked Trayvon and shot him like a dog”
Smoot-Hawley Tariff....its sponsors were very Conservative Republicans...was in response to the tariffs and trade barriers put on goods by the Europeans, once their economies began to rebound after WW I.
By the mid-1920’s, European markets for US and Western Hemisphere nation’s products (esp agriculture) were cut off. Latin America started reeling economically well before the Great Depression took hold in the US
Smoot-Hawley more than likely prevented the Depression from being much worse. Imagine the Euros dumping goods on the US...while the US was blocked from selling in Europe..and what more damage would have been done during the Depression?
Free Traders push some bad economics...and some outright falsehoods. I guess you have to do that when there are no facts to prove your point is correct
The confectionery industry is an example of a poorly applied tariff. We should never apply a tariff on the raw materials but not finished products. That's a recipe for off-shoring.
I have mixed feelings about putting tariffs on oil. Energy is a key component of the economy. If oil is a finite resource then there is an argument that we should buy other's oil and leave our's in the ground. If oil is continually produced by the earth, then we are stupid for not producing our own and a tariff would be okay.
What we should have done after the first oil price shock in the 70's, is to build plenty of nuclear plants. An oil price shock was the catalyst for the 2008 banking crisis. Oil price increases are what dried up disposable income, started causing job losses which caused mortgage defaults, which caused a money market fund to break the dollar for the first time.
I'd be okay with exempting oil. Or slowly applying any tariff on oil over several years to avoid shocks to the economy.
We've got 25% unemployment. Over 100 million Americans on food stamps. And ap says 4 out of 5 Americans are facing poverty.
Don't you think it's time we started thinking about job protection?
China has several hundred million more workers willing to take American jobs. As long as we are willing to buy from them and sell them nothing in return except our businesses and our government debt.
And you want to add another layer of government meddling to fix the problems that the government caused in the first place.
Whether it's unions, minimum wage, or other government intervention, it always backfires. Always.
Government is the problem. Not the solution. I think Reagan said that.
/johnny
Many times that's a true statement, but not always. It was after all Reagan who made Japan commit to voluntary import quotas and to produce cars in American instead of in Japan. And who put import tariffs on steel and motorcycles.
Listen to yourself. You'd think there was no need for government at all, if it "always" backfires.
Our founding fathers were well aware of the potential of government to become tyrannical or dysfunctional. But they still thought managing international trade important enough to list it in the constitution and to pass tariffs as one of their first acts.
/johnny
Ping
What are you competing for? And why are you competing? What is the goal of competition?
China is competing to take jobs and build industries. And they are doing and excellent job. It helps that they have a ton of unemployed people who will work for wages unthinkable here. That's why their government doesn't allow their people to keep the funds and buy trade goods from the U.S.. Instead their government collects the funds to buy more of our industries.
Free traders want the U.S. to compete with other countries to sell products the cheapest. Why is that our goal? Why?
Shouldn't the U.S. goal be to maximize wealth, not sell the cheapest? We aren't maximizing wealth by sending jobs overseas and leaving Americans unemployed.
But the way our rules are, individuals are indeed acting to maximize their individual wealth given the rules. Company management is given the choice:
What should be the choice is to build long term industries that provide lucrative earnings to owners, and stable employment to American workers. But that's not an option when your competition can undermine you with cheap Chinese labor. The current rules don't support that goal.
America has the largest market. We should be using that market to our advantage. We are not. Instead we are liquidating our country. Protecting our industries with import tariffs, will make sure that we remain the largest market.
As this article says: “Of course, they ignore the fact that one cannot be a consumer, unless one is first a producer, a worker. It does not matter how cheap goods are, if one does not have a job to produce money to buy those goods."
Our Market is one of our assets. And we should be leveraging that market to build wealth. Not leaving our market completely open and trying to compete on price with cheap Chinese workers. Our current policy is a recipe for high unemployment (Already there), destroyed industries (Already there), government budget deficits (already there), declining wages (already there), etc.
There is plenty of competition in the American market. We'll still have free market principles and we will still have competition to provide the best products and the lowest prices. We had high tariffs most of our history and we did just fine, and nobody accused us of not being a free market or not following free market principles.
We just won't be letting foreigners take advantage of our market without paying a tariff. We won't be liquidating our country while we try to drive American wages down to the level of the Chinese.
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