Unfortunately neither party is accountable to the average citizen, only to the elites. Therefore, the electorate will not have a choice on these potentially defining issues.
For those who believe in our current system of free trade I submit the following:
1) American became a great industrial nation in the late 1800’s. During that time the cost of the federal government was funded primarily by tariffs. Our growing economy benefited from taxes on imports.
2) While the Smoot Hawley tariff was blamed in history books for the Great Depression of the 1930’s, imports when the bill was passed in 1930 represented less than 5% of GDP, exports also less than 5%. The real cause for the Great Depression was the significant contraction of the money supply by the Federal Reserve after the stock market crash in 1929.
3) In the 1950’s and 1960’s the US manufacturing sector grew rapidly, the US economy became the strongest in the world, and the US ran a large trade surplus under much more restrictive trade barriers than today. The strength of the manufacturing economy allowed a strong middle class to develop. The US prospered with trade barriers, with dropping of quotas and tariffs associated with “free trade” in the last quarter of the 20th Century we've seen the loss of entire industries and in the first quarter of the 21st Century are seeing real declines in the standard of living of many Americans.
4) The infrastructure in the USA is declining rapidly. Under “free” trade, imports do not pay a “fair” share of the cost of maintaining roads, bridges, ports, airports, waterways, and other infrastructure support trade. Were these real costs applied to the goods being imported, instead of the general tax fund, the cost of imported goods would reflect their true costs and the cost of internally manufactured products would be more competitive.
5) Other costs, primarily environmental and social costs, are not allocated to imports. We have moved production from “clean” US factories where workers have health and other benefits, to polluting third world factories where workers toil for subsistence wages often under brutal working conditions.
6) Our trading “partners” under the current free trade model, erect many non-tariff barriers to US imports. China in particular flagrantly refuses to protect intellectual property. It is an uneven playing field.
7) High tech and international finance jobs will follow economic growth. To blindly assume we will keep the jobs with high intellectual capital is foolish. As other economies surpass ours in productive capacity, they will also increase share of high value jobs in the same way the US did in the 1950’s and 1960’s. In my own industry, textiles and apparel, we saw the manufacturing jobs flee to Asia in the 1980’s and 1990’s. Now we see the high value design and planning jobs moving to Asia. It is faster and cheaper to design product near the factories than to maintain high cost design studios in Manhattan. Visit Fashion Institute of Technology in New York and look at the large number of Asian students in the classroom learning textile and apparel design. In 20 years they won't have to come to the US for training — the jobs will be over there and their universities will train the next generation of designers. This pattern will repeat for every industry where we've lost our manufacturing capability.
The value of the dollar is eroding rapidly because we produce less and less domestically every year of what people want to buy, either inside our borders or outside. Obama is correct, people want change. Unfortunately, neither side is offering change. 2006 should have been a wake-up call. Given an absence of choice, angry voters will vote against incumbents who have no agenda to promote. Trade and immigration are issues that resonate with average voters. Who has the courage to address these issues?
I agree with your analysis, and I’m glad you nailed Smoot Hawley as part of it. That tired old chestnut was used by Algore in his debate with Ross Perot, and is trotted out every time “free trade” comes up.