Posted on 07/28/2003 6:36:40 PM PDT by 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.
No, I understood his point that by reducing nationalism, which protectionism uses as excuse, it would focus energy on the struggle between the bourgeiouse and the proletariat. I consider the 'struggle' between classes to be bunk, possibly apt in still present in the turn of the century serfdom of Russia, but not in America where people move through the 'classes' during the course of their life. Surely you've read about the Treasury Dept's own 18 year study of income mobility, right? They found people in the bottom 20% to be more likely to be in the top 20% of income earners at the end of the study period than still in the bottom 20%.
If you're arguing that Marx is right, and that by not having tariffs people are going to start turning their animosity toward 'the rich' instead of the 'Red Chinese' or enemy du jour and consequently embark on a communist revolution, well, you go ahead and defend that, I think its bunk...
Telemarketing is a horrible way to make a living. Those jobs they should send to France...
I think that we are going through something like the early days of the industrial revolution. That was hugely disruptive for a lot of people. For many it was a frightening and bewildering time. Initially it seemed to create more losers than winners but in the end created a far better world for those countries that embraced (or at least went along with) it. Likewise, I think the end of this "globalization" period will leave a far better world and for far more people than industrialization benefited.
The problem is of course we get to live through the unpleasant disruptive period. It seems we may have a bad time of it but our grandchildren will love us!
Sadly, I have no answers, except to say blaming the "rich", "greedy" corporations is not the answer. Blaming them for outsourcing is like blaming the ordinary family for buying made-in-China stuff because it is cheaper and fits their budget. Both are responding to price incentives.
The "rich" and the "greedy" corporations are responding to macro level forces. I don't think even governments can control these forces. I also know that socialism, communism and other wealth redistribution ideas are not the answer. They would destroy what we have, but put nothing, except barbarism in its place.
I don't want to end on a gloomy note so I will say that the US has been a resilient country. It's people have adapted and grown to many challenges and I am sure they will again. Even in the darkest days of the depression 75% of people had work. It was a tough time but most survived. It laid the ground for the massive expansion that we still enjoy.
To all the doomsayers, you may make money selling-short industrial stocks but you should be careful about selling America short.
It is true that we are over-taxed, but reducing those taxes will mean cuts to "our most cherished" programs. About 45% of federal government expenditure goes on just three programs; Social Security, Medicare, and Medicaid. We spend 20% on defense and general government, and about 15% on interest on debt. In other words, getting rid of public broadcasting and the National Endowment for the Arts will not allow for *meaningful* reductions in tax. We will have to look to where the money is spent, and that means the big programs. That is something that no *electable* party has the stomach for and something even the conservatives on this board (probably to the right of the "average" voter) do not have the stomach for.
On illegal immigration; it seems strange to be importing (mainly) unskilled labor at the same time we are exporting unskilled jobs. That *is* something government can do something about, it is a pity they don't.
The only thing worse than having telemarketers call my house would be to have French telemarketers call my house!
I have no kids.
I routinely spray aerosol cans into the air. Xcrew the grandkids; I'm cold now!
Yeah, thanks. Say, after the sermon, do they serve soup?
While I'm sure many businesses have millions of dollars in revenue, I'm confident most don't. Most are small businesses that don't need multi-million dollar solutions. If Americans won't pursue that market, someone will. In fact, one of my best friends does just that. He was laid off after less than a year on the job as a Oracle DBA. He finished up his certification, at the cost of 9K, but the small businesses don't care about his cert., and he doesn't have the years experience that many in his field finding themselves laid off do in the traditional job hunt. Did he cry and whine about 'furriners' taking away his opportunities? Nope, he started going to small businesses and telling them how he could help them. Now he is in business for himself, setting up point of sale and inventory systems for small businesses. If people would whine less and instead concentrate on finding out what their neighbor wants done, and will part with some cash to see accomplished, the economy would be much better off...
I'm no big fan of free trade, and I don't know whether free trade could have cured the Great Depression. Roosevelt's policies certainly didn't. But closing down markets with high tariffs was probably the wrong response to hard times.
Those who lived through the Depression and came to power after the war certainly drew that conclusion, and the argument that free trade makes recessions (and maybe inflation, too) milder is one that protectionists will have to take seriously.
I have no kids.
I routinely spray aerosol cans into the air. Xcrew the grandkids; I'm cold now!
Just so I can waste more fossil fuel, I turn on the heating and air-conditioning and let them fight it out amongst themselves!
There are many theories as to why the depression lasted as long as it did. Suffice to say the world wide depression came to the USA and there were a number of outstanding issues that seemed to agravate the problem including a Federal Reserve contraction of credit in the late 1920's that was not reversed until the mid 1930's but by that time the impact of German re-militarization was having an effect. one can argue that Smoot Haeley mitigated the effects of the depression as well as argue that it prolonged the depression. In fact there were/are insufficient measurements to prove anything regarding this point. In simple terms there had been other depressions in teh past that would have been classified as being as severe as the depression of the 1930's. There was the whole "Free Silver" debate of the 1890's with William Jennings Bryan arguing for free silver coinage and going off the Gold Standard. However, until Arizona was admitted to the Union there was still a frontier that allowed new starts nad the economy had not reached a level of national integration that came about after WWI so that provided some additional mitigation for prior downturns. I'm no big fan of free trade, and I don't know whether free trade could have cured the Great Depression. Roosevelt's policies certainly didn't. But closing down markets with high tariffs was probably the wrong response to hard times.
Again I am not arguing that the Smoot Hawley act was a great idea I am merely wquestioning it as the "Cause of teh Great Depression." Those who lived through the Depression and came to power after the war certainly drew that conclusion, and the argument that free trade makes recessions (and maybe inflation, too) milder is one that protectionists will have to take seriously.
Actually given the tariff policies of teh 1940's after WWII and the 1950's and 1960's I do not think this argument about the conclusions reacxhed by the generation that lived through the Great Depression is valid. The economic consensus academics of teh 1950's and 1960's was that John Maynard Keynes had the answers. I do not subscribe to that view merely restating what was current.
As to the argument that Free Trade might make recessions milder and maybe inflation milder that is an argment I will listen to and take seriuously but I will ask for evidence not theory. We have a couple of examples of nations running without tariffs in a world where otehr nations have in place protective tariffs and those examples do not support this thesis.
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