Why FREE TRADE was never the answer.

self | 7/28/03 | RaceBannon

[RaceBannon]

There has been a few threads on here where Free Trader enthusiasts have defended their view, and have been responded to by those who feel that Free Trade is not helping the American Economy, in fact, is part of the reason we are NOT going to see a great recovery any time soon.

I am one of the latter. The following is a cut and paste job, taken from my own comments on these threads, which I feel tell my side of the story.

Some of the points are repeatd, 3 and 4 times. That is because I feel they are the forgotten reasons and ideas why we are in what I believe are dire economic straits.

Feel free to comment.

[Cacophonous]

The traders coming into the ports pay taxes?

Of course, the country was funded entirely on taxes until the early 1900s (was it 1917?).

[CWOJackson]

Which is why one of the leading anti-free traders, pat buchannan and his wife only drove Mercedes until a reported pointed out the discrepancy in his America first rhetoric. Zip, the very next week pat discovered Cadillacs.

[CWOJackson]

Tariffs...taxes. Money taken by the government to pay for government. Hmmmm? Yes, there is obviously a difference.

[Cacophonous]

That WAS a sad bit of hypocrisy.

[Cacophonous]

I woould rather pay more for a good to support a tariff than I would a tax. The former is the equivalent of a sales tax; if I don't want to pay it, I don't buy the product. I say we do away with our current "voluntary" income tax system completely, and go back to tariffs. Might force the feddle gummint to spend its money more wisely too.

Well, maybe not.

[CWOJackson]

buchanan and his Mercedes...it sure was.

It's amazing how so many of the America firsters don't practise what they preach (for others).

[RaceBannon]

Read his quote again, also read post #74

Free Trade IS a destroyer of economies, and THAT was why Marx liked it, not because he thought it was a good thing to do, but a good thing because it brought about revolution.

[Gunslingr3]

The point is you get what you pay for. If you want a cheap immitation that doesn't really meet your needs by all means get one made in China. If your going to bank your business on it maybe it's worth the extra money. You have to spend money to make money.

What if the cheaper product does meet your needs? Should you pay more for it and thereby lower your standard of living and trap capital in a less productive production structure?

[Cacophonous]

Hypocrisy is rampant, and not limited to America Firsters, or any other group.

[CWOJackson]

I pay whether it's a tariff or a tax...the government is not a wise money manager, which is why they shouldn't interfer with commercial interprises that are.

[LibertyAndJusticeForAll]

ILLEGALS do not just mow lawns. They work in construction, hotels, factories, janitorial, restaurants, etc. There have been numerous articles written in major newspapers describing the FACT the ILLEGALS are paid $10-22/hour TAX FREE. They are TAKING JOBS FROM AMERICANS! They are CRIMINALS. They are here ILLEGALLY! Do LAWS and the CONSTITUTION mean NOTHING to you?

Nike shoes are manufactured overseas by near slave labor. How much are a pair of Nike shoes?
Have you read what the average corporate exec gets just for an annual bonus?
I imagine the bribes paid to our more corrupt congressmen are rather expensive too!
For the first 200 years this nation used Protective Tariffs to protect American jobs.
Before the Civil War, the North used tariffs to combat the South's use of slave labor.

[Willie Green]

Your quoting Marx saying that free trade is destructive, In case no one told you, Marx was an idiot. Furthermore, in that quote he is stating that free trade is destructive to the social order, by removing nationalism it would focus discord on the conflict he percieved between the bourgeiouse and proletariat. Like I said, he was an idiot...

Well I quoted Adam Smith back in reply #35 of this thread.
Rather than repost the whole thing, I can repeat the pertinent portion for you:

"... cheaper foreign goods of the same kind might be poured so fast into the home market as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence. The disorder which this would occasion might no doubt be very considerable...."

So how about that?
Karl Marx and Adam Smith agree!!!

[RockyMtnMan]

Fact of the matter is that "tariffs" go straight into the Treasury and not into the hands of corporations as many of these Free Trader's believe. How this is "corporate subsidization" I have no idea. The more money they collect in tariffs the lower corporate taxes can be. Why people are against our government collecting money from other governments is beyond me.

Ohh, before I get flamed with "but our trading partners impose tariffs on our products limiting our exports" think of this: Wouldn't you rather have the government negotiate a fair settlement that both lowers your taxes and equalizes your opportunity to compete with foreign goods? Right now these countries are taxing our products anyway and we are getting NO benefit in the trade.

They don't impose tariffs on labor because we are giving them a valuable asset, intellectual capital. As a matter of fact we are paying them to learn all of our trade secrets. What a deal!! Not only are they creating future competitors but they are giving them the software to do it in the process, yes copying software is quite easy. Just look at all the problems Microsoft is having with piracy in China, now compound that 100 fold with software THEY write for us (or India writes and China spirits away).

If Corporate America is so afraid of entrepreneurs, what the hell do they think they are enabling in India, China, Russia, etc?

[Cacophonous]

The government has to be funded, even a small such as I favor. It should be made small, kept small, funded with tariffs, and the income tax abolished. I don't know why otherwise sensible people that consider themselves conservative have a problem with this.

[CWOJackson]

"The more money they collect in tariffs the lower corporate taxes can be."

Do you really believe the government would CUT corporate taxes?

[Alberta's Child]

ILLEGALS do not just mow lawns. They work in construction, hotels, factories, janitorial, restaurants, etc. There have been numerous articles written in major newspapers describing the FACT the ILLEGALS are paid $10-22/hour TAX FREE.

I agree. Which means the problem is the taxes as much as the illegal labor.

Nike shoes are manufactured overseas by near slave labor.

Are they? Or are they just manufactured overseas by people who are paid wages that are considered slave labor only when measured in U.S. dollars? If Nike were to close its plants in Malaysia and Indonesia, do you think the people who work there are going to suddenly enroll in universities and study C++ programming, calculus, and molecular physics?

Before the Civil War, the North used tariffs to combat the South's use of slave labor.

Before the Civil War, the North was the epitome of hypocrisy. The North was not opposed to slavery out of a sense of moral indignation -- it was opposed to slavery because it didn't need the slaves. I would venture to guess that the life of a slave in the South was no worse than the life of an Irish immigrant being sent to work in a coal mine at the age of 12, only to die of severe respiratory ailments before the age of 40.

[Cacophonous]

Hmm...you caught me off-guard...I wasn't really following that particular conversation. So let me read up and give you a more learned response.

However, in the spirit of cheerfully expounding on subjects of which I have no knowledge, let me say that I think foreign workers should be taxed at a higher rate than American citizens, enough to compensate the job lost to an American (and no, I have no idea how to compute that). Think of it as a tariff on labor, if labor can be thought of as a raw material, a resource or a commodity.

[CWOJackson]

I have a big problem with and I live in the Seattle area. Airbus is killing Boeing, so do we place high tariffs on importing Airbus?

Look at JetBlue out east. By all accounts they are extremely successful and leading the industry in many ways. And shortly after 9/11 they announced with pathetic timing, that they were going to place a very large order for more Airbus planes.

9/11 also had a hugh impact on Boeing.

JetBlue's decision to go with Airbus is based on the fact that they already use AirBus exclusively, so they only need to support one line of aircraft. They initially purchased Airbus because they are reliable and cheaper. Now they are leading the industry and are profitable.

[RockyMtnMan]

If your willing to risk having poor product support, delays in bug fixes, etc to save $40k maybe your time to profitability is too short or unrealistic. Custom software is expensive for a reason.

The software my company makes can run into the millions, but over a short period of time will save the customer many more millions than their initial investment.

Todays managers are not capable of thinking long term, something the Chinese are very good at.

[Cacophonous]

Airbus is subsidized by the government of France (and, I think, Italy and Germany). IT CANNOT LOSE MONEY; it is therefore always going to beat Boeing, which is not subsidized to the same degree (I know some US dollars go into it). That only proves that free trade cannot exist between differing economic systems. Of course JetBlue and other airlines are going to buy from Airbus; they are artficially cheaper. I'm advocating slapping a tariff on Airbus so that Boeing can compete with them.