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.
Maybe it has something with the memory of free market time under the Batista regime (shown in the Godfather II)?
Why should they? Actually they might long for the foreign conquest (a secret of easy Spanish conquest of Aztec and Inkas empires and of parts of Roman empire by the barbarians)
Ditto the color TV.
When color TV first came out a set cost as much as a new car. Within a few years a majority of families could afford one -- and all production cost reductions done here.
And like the 1990 computer v. the 1985 computer the later and cheaper TVs were superior in every way -- all improvements made here.
Cheaper and better was a product of Yankee Ingenuity. No one suffered because goods were produced here. Go figure.
Not truly Communist in the sense that the state has withered away but otherwise, yes. IMO.
I know that Deng studied the Soviets' experience with Lenin's New Economic Plan (NEP) even grilling Armand Hammer about his experience in the USSR in the era.
I've seen a study done by CP/USA acknowledging that "socialism with Chinese characteristics" works as long as the Communist Party of China remains supreme.
The CPC believes that China is in the primary stages of building socialism -- and who are the masters of building strong economies for this future workers' paradise? Western useful idiots.
I was remiss in not making it clear that I was talking exclusively about "free trading" technology, wealth, and production to developing nations.
I am FOR free trade with countries that do not depend upon wealth transfers to build their economies. I am especially against "free trading" away our goodies to communist China.
Countries should build their economies the old fashion way not the modern Davos world of wealth transfers advocated by New Democrat Third Way progressives and their conservative "free trader" useful idiots. IMO.
Great post about comparing how looking back makes the mistake of comparing apples and oranges.
For example housing which is most people's biggest cost in life by far. The majority of what people are paying for their house is the land. Which is artificially driven up by the no-growthers stopping much development. And has nothing to do with free trade.
Germany was formed in 1871, so yes, it was expanding, a new nation.
Buchanan is correct that the trade deficit is rapidly getting worse. I had been following it on a yearly basis at http://home.att.net/~rdavis2/tradeall.html. However, it's worsening so quickly now, I've started to follow it on a monthly basis. The following graph shows that even its monthly movement is decidedly down:
The numbers can be seen at http://home.att.net/~rdavis2/gstrade.html.
Huh? When was the last time you bought land and then built a house? I paid $63K for the land and another $200K for the house. Where did you ever get your idea?
Hah hah hah! Cell phones? That make me feel better.
Libertarianism.
Ditto. Why don't you find one on this thread that argues that free trade leads to antagonism of the proletariat and class warfare. Ping me when you hear something.
A $4000 Pontiac Star Chief (1958) would sell for $26,546.00 today.
No matter how you dress the pig, the fact remains that the cost, inflation-adjusted, is about the same.
The electronic doodads replaced actual sheet metal, and there are production efficiencies which have been achieved in the last 50 years. So what?
One can hardly argue that the cost of tax and regulation has been deleterious to industry in the US, and deleterious to the welfare of US residents in many regards.
But you miss the point. The concept PJBuchanan has consistently promoted has been FAIR trade--iow, adjusting US tariffs to compensate for tax/reg costs on a country-by-country basis.
You are correct.
The argument is NOT about "free" trade, but "fair" trade.
Since the US burdens its industry and population with relatively high tax and regulation costs, tariffs should be enacted to reflect the differences.
Currency manipulators (e.g., PRChina) get the same treatment. Of course, PRC gets both treatments...
You can prove this, of course.
In 1965, I was working part-time changing oil and filling gas tanks, at $2.15/hour.
That's $12.65 today--more than WallyWorld's average $10.15/hour wage.
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