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.
Robert J. Samuelson June 26, 2003; Page A29 Section: Editorial
http://nl.newsbank.com/nl-search/we/Archives?p_product=WP&p_theme=wpost&p_action=search&p_maxdocs=200&p_text_search-0="Boeing's%20Rapid%20Descent"&p_field_label-0=Section&s_dispstring=Boeing's%20Rapid%20Descent%20AND%20section(*)%20AND%20date(last%20365%20days)&p_field_date-0=YMD_date&p_params_date-0=date:B,E&p_text_date-0=-365qzD&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no
I'd have to pay to get the story. But one interesting note is that the United states did not demand for the elimination of subsidizes for Airbus in 1992. Its a long article.
Boeing is often it's own worst enemy, having worked for it
No doubt.
Whether the Depression would have been shorter or less severe without Smoot-Hawley has often been discussed from a variety of points of view. Defenders of the tariff point out, that foreign trade was less important in those days, but it can't be altogether ignored, either. Some have argued that whatever the international consequences of the tariff, the price rigidity it encouraged at home hurt recovery. Most sources I've seen do agree that the protectionist cycle hurt European economies, and this had dire political and military consequences for them -- and eventually for us.
In school, my textbooks and teachers were inclined to think that the tariff did make things worse. I don't know enough to say for sure that it did or that it didn't. But the political lesson drawn from the protectionism of the 1930s was that shutting economies off from one another produced the conditions that made Hitler and Tojo possible. A choice was made in favor of economic competition and political cooperation, rather than economic self-reliance and military conquest.
Whether this means that free trade is always better than tariffs is another question. Free trade agreements between two or countries usually involve protection against outsiders, so one doesn't wholly escape tariffs and protectionism. There may be problems with free trade, but from everything that I've read, there are also real dangers to carrying protectionism too far.
Countries may well want to avoid having living standards dragged down by foreign competition. But over time, protectionism makes those countries less efficient. And in times of recession or inflation, prices may well have to fall to save the economy.
That was my post (I have become a committed off shorer), and you are correct. As outsourcing becomes more abundant, more firms can automate what they do. This creates wealth in the US. What is the impact of firms doing things more efficiently for their customers, even small firms? What is the gain to the GDP because of this? I believe it will be incalculable. Nobody talks about this, and I believe that is short sighted.
Why people want Americans to sit in cubicles and write tedious and repetitive lines of computer code is beyond me. Move to the next paradigm. The Internet will make the civil rights movement look like a tea party.
The Internet is the great equalizer.
Ok, my Russian programmers will write it for you for $25,000. Heck for 25 grand they would write a whole new operating system for you.
Send me the specs and we will have you a proposal in 24 hours. Heck, I dont even write proposals anymore, they do everything in Moscow, where you can buy a decent bottle of vodka for $2 U.S.
Heck, $25,000 will buy you 12,500 bottles of vodka, enough incentives for any good Muscovite (just kidding here, I dont think any of my programmers drink, just trying to be illustrative).
Freepmail me or at jroehl2 at yahoo.com.
I expect a latte. ;^)
Check yer mail.
This is definitely an unsupported conclusion. the rise of the Nazi Party had started before 1929. Musolini was already in power in the mid 1920's. The Japanese militarists became powerful after teh Russian Japanese war of 1903. japan was already in China before the Smoot Hawley tariffs were enacted. germany had already experienced the hypeer inflation and depression that allowed teh Nazi Party to gain its electoral viictory. your teachers are attributing a causative relationship to something that pretty much happened after the conditions it is said to have caused.
but from everything that I've read, there are also real dangers to carrying protectionism too far.
I tend to agree and I really am not defending the Smoot Hawley Tariffs. They combined the extreme agriculrural tariffs of one house of Congress (I think the Senate) with the extreme manufacturing tariffs of the other House (I may have mixed up which was the House version and which was the Senate version). Now the harm they did is very much open to debate. Now Milton Friedman published a thesis that teh Smoot Hawley tariffs which were enacted in response to European tariffs caused teh Depression. Other economists have tried to link some political statements by Senate and House leaders about the future enactment of tariffs to Black Tuesday but that I do not completely buy into either. there is absoluetly no way the level of protective tariffs could be predicted months before enactment.
We need reasonable policies based upon factual analysis and prudence. I recognize the theoretical benefits of totally Free Trade whereing each nation and individual uses his/her comparative advantage in a free market to approach the optimal production and distribution of goods and services. The problem with the theory is that in practice it does not work according to the theoretical model. The founders of this nation were very much captialists and belived in as much free trade as possible but they also understood the benefits of protective tariffs and implemented them from the star of our Constitutional form of government.
The former is a cornerstone of capitalism. In order tp work, the latter depends on the former for everyone concerned. Therefore, "free trade" (as it is currently envisioned) between differing economic systems will never happen.
The former is a cornerstone of capitalism. In order tp work, the latter depends on the former for everyone concerned. Therefore, "free trade" (as it is currently envisioned) between differing economic systems will never happen.
Precisely my point. While a global Free market system would be fantastic IMHO we are not anywhere close to implementing that nor will we be in my lifetime of even the lifetime of anyone alive today.
Given the history of these nations and cultures it is going to take a long time. Japan became a Constitutional Monarchy and Singapore has definitely become a very Capitalist Free market enclave. Likewise in the Middle east there is a very strong trader tradition but the Islamic prohibition on interest and teh Koranic implication that government should be theocratic in nature and enforce Islamic law also get in the way.
I for one, do not think it is worth it for the US to commit resources, and most important, lives, to make sure ragheads know how to govern themselves. It's a huge, long-term proposition, expensive in terms of lives (and money) and not worth it.
I would also submit (and risk the wrath of the continually offended) that the Oriental mindset, culture and work ethic are more conducive to representative government than the Middle Eastern.
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