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Riding the free trade raft over the falls
WorldNetDaily ^ | April 18, 2005 | Patrick J. Buchanan

Posted on 04/18/2005 6:37:40 AM PDT by A. Pole

These are not the halcyon days of the Republicans' champion of open borders and free trade, Jack Kemp.

The "Minutemen," who appeared in Cochise County, Ariz., April 1 to highlight the invasion President Bush will not halt, are being hailed by conservative media and congressmen as patriots, as they are dismissed by the president as "irrational vigilantes."

Comes now the trade shocker for February. The deficit hit an all-time monthly record: $61 billion. The annual U.S. trade deficit is now running at $717 billion, $100 billion above the 2004 record.

Smelling political capital, Hillary Clinton and Chuck Schumer are co-sponsoring a 27 percent tariff on goods from China. Beijing ran a $162 billion trade surplus with us in 2004 in what trade expert Charles McMillion calls "The World's Most Unequal Trading Relationship."

The waters are rising around the Kemp Republicans. For these gargantuan deficits are sinking the dollar, denuding us of industry and increasing our dependence on imports for the components of our weapons, the necessities of our national life and the $2 billion in borrowed money we need daily now – to continue consuming beyond our capacity to pay.

Brother Kemp is correct in his Washington Times column in saying Beijing has not been manipulating its currency. China fixed the value of the renminbi at eight to the dollar in 1994, just as we once tied the dollar to gold. Beijing rightly objects, "It is not our fault your dollar is sinking."

But here, the free-traders enter a cul de sac. They recoil at tariffs like Lucifer from holy water, but have no idea how to stop the hemorrhaging of jobs, technology, factories and dollars, except exhortation and prayer. For as 19th-century liberals, they believe free trade is "God's Diplomacy." Whoever rejects it sins in the heart. True believers all, they will ride this raft right over the falls and take us with them. This unyielding belief in the salvific power of free trade is, like socialism, one of modernity's secular religions.

As Kemp's column testifies, these folks are as light on history as they are long on ideology. Kemp claims "there is no demonstrable instance in economic history where nations were made worse off by free and open trade. There are only the doomsday scenarios spun out of the imagination of half-baked economists ..."

But between 1860 and 1914, Great Britain, which began the era with an economy twice the size of ours, ended it with an economy not half the size of ours. Britain worshipped at the altar of free trade, while America practiced protectionism from Lincoln to McKinley to Teddy Roosevelt to Taft. Tariffs averaged 40 percent and U.S. growth 4 percent a year for 50 years.

Bismarckian Germany did not exist in 1860. But by 1914, by imitating protectionist America, she had an economy larger than Great Britain's. Were it not for protectionist America shipping free-trade Britain the necessities of national survival from 1914 to 1917, Britain would have lost the war to Germany, so great was her dependence on imports. A real-life "doomsday scenario," thanks to a few dozen German U-boats.

Jack Kemp notwithstanding, protectionism has been behind the rise of every great power in modern history: Great Britain under the Acts of Navigation up to 1850, the America of 1860 to 1914, Germany from 1870 to 1914, Japan from 1950 to 1990 and China, which has grown at 9 percent a year for a decade. As China demonstrates, it is a mistake to assume free trade, or even democracy, is indispensable to growth.

Kemp trots out Smoot-Hawley, the 1930 tariff law, for a ritual scourging, suggesting it caused the Depression. But this, too, is hoary myth. In the 1940s and 1950s, schoolchildren and college students were indoctrinated in such nonsense by FDR-worshipping teachers whose life's vocation was to discredit the tariff hikes and tax cuts of Harding and Coolidge that led to the most spectacular growth in U.S. history – 7 percent a year in the Roaring Twenties. Under high-tariff Harding-Coolidge, the feds' tax take shrank to 3 percent of GNP.

As high tariffs and low or no income taxes made the GOP America's Party from 1860 to 1932, the Wilsonianism of Bush I and Bush II – open borders, free trade, wars for global democracy – has destroyed the Nixon-Reagan New Majority that used to give the GOP 49-state landslides. Bush carried 31 states in his re-election bid. He would have lost had Democrats capitalized on the free-trade folly that put in play, until the final hours, the indispensable Republican state of Ohio.

Kemp calls China our trade partner – surely a polite way to describe a regime that persecutes Catholics, brutalizes dissidents, targets 600 rockets on Taiwan, lets North Korea use its bases to ship missile and nuclear technology to anti-American regimes, and refuses to denounce racist riots designed to intimidate our Japanese allies.

As some on the Old Right have said since Bush I succeeded Reagan, open borders, free-trade globalism and wars for democracy are not conservatism, but its antithesis. And they will drown the GOP.

The Republicans jumping off the raft into the river and swimming desperately for shore testify to it more eloquently than words.


TOPICS: Business/Economy; Constitution/Conservatism; Foreign Affairs; Germany; United Kingdom
KEYWORDS: cluelesspat; deficit; economy; eeyore; joebtfsplk; learnchinesenow; notickeenowashee; repent; sackclothandashes; tariffs; trade; wearedoomed
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To: ninenot

"At 30 cents/hour,..."

Not an accurate depiction of the labor rate in China.

"$8500.00 car only takes, ah, lemmeeesee heah, 28,333 hours--about 10 years' work--to pay off (excluding interest.)"

Maybe for one person. But when cars first came to the US many creative methods were used in purchasing the cars, until wages caught up. It will not be any different in China.

"What GM is actually predicting is that the US market for GM cars will be gone by 2020."

Wrong again.

Rhetoric isn't generally convincing.


141 posted on 04/18/2005 11:12:10 AM PDT by CSM
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To: ancient_geezer
"As far as tariffs go, there is nothing at all to prevent us from imposing selective tariffs as well as NRST on imports in specific international trade situations where that would be of value."

Long, long overdue to directly confront the EU over it's "Business Launch" subsidies of each and EVERY product in the AirBus inventory. A nice 35% retaliatory tariff to offset their subsidy they refuse to relinquish would be, at a minimum, a fair response.

142 posted on 04/18/2005 11:16:47 AM PDT by Paul Ross (Working for God on earth does not pay much, but His Retirement plan is out of this world.)
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To: hedgetrimmer

"If tariffs protect the rights of the individual, then they do not reduce spending power, they protect it. If a tariff allows us to preserve our system of government, then how does it harm the quality of our life?"

What rights of the individual are being protected? Do we have a right to a certain wage or specific type of employement?

Your argument is that we should have more government involvement to solve problems that are created by to much government involvement. It would make more sense to reduce corporate taxes and reduce regulations.

How profitable do you think US manufacturers would be if they could not access markets outside of the US?


143 posted on 04/18/2005 11:22:35 AM PDT by CSM
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To: lemura
FR is a tougher forum than what you're probably used to

Nephi has been here since 1998, and you've been here nine months -- you're just a newborn.

144 posted on 04/18/2005 11:32:12 AM PDT by meadsjn
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To: Strategerist
Communists view economics as a zero-sum game (nobody gets wealthy except at the expense of others) which is precisely the same view that protectionists have.

Free trade dogma insists that everyone benefits from it in the long run, but history does not agree. In history there are winners and there are losers. Protectionism creates winners (pre 1870 England, Wilhelmine Germany, pre 1945 America, China, India, and Japan) and free trade creates losers (Spain, Holland, post 1900 England, post 1970 America).

Free trade, like Marxism, is a textbook theory that just plain does not work in the real world because nations are no more altruistic than people. When pushed to extremes it creates economic distortions that benefit people who live off of investments at the direct expense of people who live off of paychecks as the economy stops making things.

145 posted on 04/18/2005 11:39:15 AM PDT by Sam the Sham
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To: A. Pole
But here, the free-traders enter a cul de sac. They recoil at tariffs like Lucifer from holy water, but have no idea how to stop the hemorrhaging of jobs, technology, factories and dollars, except exhortation and prayer.

Go Pat Go!

146 posted on 04/18/2005 11:44:42 AM PDT by Penner
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To: Alberta's Child

So America expanded economically because it had a frontier while Britain didn't ? What, pray tell, were Canada, Australia, New Zealand, and southern Africa ? Not to mention the rest of the Empire. A little thing like the Indian subcontinent ?


147 posted on 04/18/2005 11:44:52 AM PDT by Sam the Sham
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To: 1rudeboy

Yelling "commie" is what the free trader always does when the facts have argued him into a corner.

Tell me how Hamilton, Lincoln, McKinley, Taft, Coolidge, and Hoover were commies.


148 posted on 04/18/2005 11:48:29 AM PDT by Sam the Sham
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To: Sam the Sham

"(.....pre 1945 America, China, India, and Japan)"

You're kidding right? The great depression, slave wages, 3rd world lifestyles and getting a nuclear bomb dropped on you is what you would consider "benefits"? For some dumb reason, I would prefer to live with the trade policies of post 1970 America, and live in the resulting environment, than live in China, India or any other protectionist country.


149 posted on 04/18/2005 11:52:17 AM PDT by CSM
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To: Sam the Sham
Free trade, like Marxism, is a textbook theory that just plain does not work in the real world because nations are no more altruistic than people.

Well Put Sam......

150 posted on 04/18/2005 12:00:02 PM PDT by WRhine (Is anything Treasonous these days?)
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To: ninenot; Sam Cree; Nephi; 1rudeboy; KC_Conspirator

When Nixon went to China, it was with great hopes for openning up the "China market" to America exports. What has happenned is openning up the "America market" to Chinese exports. That has to qualify as one of history's all time greatest goofs.

The point I see none of the free trader ideologues addressing is the extremely pertinent one Buchanan makes about the decline of the GOP. With the decline in living standards for most Americans due to free trade, the age of GOP landslides is over. As he wisely notes, Hillary is realizing that there is more political capital in an economic populism that talks about preserving American jobs and industries than in sodomite marriage. Kerry backed off from running on economic populism and that is why he lost Ohio (Guess what ? The Democrats understand that now.). If the GOP in 2008 continues the Bush open borders free trade policies, get ready for New Deal II.

The best metaphor in my mind for the drop in American living standards, is the fact that adjusted for inflation, a category of car pretty much costs the same as it did in 1970. Only then the car loans were three years. Now they are six. And those were cars build entirely by high paid unionized factory workers, not low paid Mexicans and Chinese as now.


151 posted on 04/18/2005 12:03:15 PM PDT by Sam the Sham
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To: Sam the Sham
With the decline in living standards for most Americans due to free trade, the age of GOP landslides is over.

Nothing seems to indicate that all.

152 posted on 04/18/2005 12:06:55 PM PDT by KC_Conspirator (This space outsourced to India)
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To: A. Pole
Pitchfork Brigade bump!

Friends, neither Beltway party is going to drain this swamp, because to them it is not a swamp at all, but a protected wetland and their natural habitat. They swim in it, feed in it, spawn in it.

-- Patrick J. Buchanan, "A Plague on Both Your Houses"


153 posted on 04/18/2005 12:08:25 PM PDT by Willie Green (Go Pat Go!!!)
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To: CSM
Not an accurate depiction of the labor rate in China

You have a better one? Please, enlighten us!!

But when cars first came to the US many creative methods were used in purchasing the cars, until wages caught up.

Such as?

"What GM is actually predicting is that the US market for GM cars will be gone by 2020."

I will admit to being sarcastic.

However, Forbes Magazine is not much more optimistic about GM's market position in the USA than I am.

154 posted on 04/18/2005 12:10:22 PM PDT by ninenot (Minister of Membership, TomasTorquemadaGentlemen'sClub)
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To: CSM

You are saying very silly things.


155 posted on 04/18/2005 12:11:24 PM PDT by Sam the Sham
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To: CSM

In an ideal world, income tax would be reduced by the amount raised by tariffs.

Elect better Congressmen--and for that matter, an Executive who cares.


156 posted on 04/18/2005 12:11:36 PM PDT by ninenot (Minister of Membership, TomasTorquemadaGentlemen'sClub)
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To: Sam the Sham
"When Nixon went to China, it was with great hopes for openning up the "China market" to America exports. What has happenned is openning up the "America market" to Chinese exports. That has to qualify as one of history's all time greatest goofs."

Nixon also wanted a counter to Russia. The trade problem became fully swing when Congress and Bush made China a permanent favored trading nation. Giving factory shippers the big go-ahead.

So it remains, where are the good paying jobs in this country that free-trade shills promised would replace the low-paying jobs traded away?

Free trade shills - do some reporting. Check your local newspaper. Tell us what are the big job needs are in your area? Mine are automotive and truck driving.

157 posted on 04/18/2005 12:12:25 PM PDT by ex-snook (Exporting jobs and the money to buy America is lose-lose..)
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To: lemura
It's obvious you've never read Wealth of Nations.

Don't know about others, but I have.

If you had, you would never have quoted the reference to Smith's four exceptions since they in no way support your position for protectionist tariffs. Nice bluff, however, FR is a tougher forum than what you're probably used to.

Time for you to reread Smith.  What you want is in Book Four, Chapter Two.  The information is not so easily laid out, but it is there.  Buchannan got it right.

158 posted on 04/18/2005 12:13:43 PM PDT by Racehorse (Where your treasure is, there will your heart be also.)
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To: Sam the Sham

Never forget that Nixon WAS a CROOK!!


159 posted on 04/18/2005 12:13:45 PM PDT by ninenot (Minister of Membership, TomasTorquemadaGentlemen'sClub)
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To: KC_Conspirator

Really ?

Gore got a majority of the popular vote.

Kerry was a stiff who had the most cultural left record in the Senate but he came within a few thousand votes in Ohio of taking it all.

Both of the last two elections went down to the wire. The easy GOP landslides of the 80's are gone because the GOP can no longer run on prosperity.


160 posted on 04/18/2005 12:15:16 PM PDT by Sam the Sham
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