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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: superiorslots

"More people than ever have an extra job to make up for their main job which has low or stagnant wages."

Show me.

If we could stop the ever expanding cost of government and government controlled utilities, a stagnant wage wouldn't necessarily be as bad as being reflected here. Our own government is doing more harm to the individual quality of life than China.


301 posted on 04/19/2005 10:47:39 AM PDT by CSM
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To: Cronos

Yes. But telecommunications is hardly a bubble economy. Unstable at times, definately, but not a bubble economy. In fact, my former company called in people from GE to "evaluate" the company in which their findings said they should send everything to India. Its been 3 years and nothing has improved, not even stock, which was the short term goal.


302 posted on 04/19/2005 11:03:46 AM PDT by KC_Conspirator (This space outsourced to India)
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To: Cronos
Well, we're BOTH wrong

Ok.  I'll settle for that.  But, wasn't it fun?  :-)

Well, I enjoyed it . . . and learned a thing or two or three.  Hope to bump up against you in another thread which lends itself to historical interpretation . . . and dispute!

303 posted on 04/19/2005 11:25:57 AM PDT by Racehorse (Where your treasure is, there will your heart be also.)
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To: 1rudeboy
Disprove" Smith? I embrace him, especially the following from Book Four, Chapter Two (say, isn't that what you claim to have read?):

Oh, crude.  You neither embrace nor have read that chapter.  Had you read it you would be arguing something quite different.  It is more than okay to claim I do not understand what I have read.  There is always the chance I may not have understood it.  That does happen.  But first, you must read the material.

What does Smith say about tariffs?

304 posted on 04/19/2005 11:32:03 AM PDT by Racehorse (Where your treasure is, there will your heart be also.)
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To: A. Pole

RE: 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.

He forgot - blows the heads off of 25 year old women.


305 posted on 04/19/2005 11:37:55 AM PDT by GOP_1900AD (Stomping on "PC," destroying the Left, and smoking out faux "conservatives" - Take Back The GOP!)
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To: babble-on
Congress Likely To Approve China Pact, WASHINGTON, Nov. 23, 1999 (UPI)

". . .The U.S. trade deficit with China for September rose to an unprecedented $8.2 billion - the largest monthly trade deficit between any two nations in recorded history. If that deficit lasted for a full year the U.S. trade deficit with China, already a record $60 billion a year, would soar to almost $100 billion a year." [End excerpt]

What is it today?

This old news item reports on the New Democrat Third Way progessives like Bill Clinton and "free trade" mainline Republicans like Mr. Lilley efforts to get most favored status for the Chi-coms:

"Lilley said that, contrary to the arguments made by the protectionists, bringing China into the WTO might lower the U.S. trade deficit with China, not increase it.

"'In practice, they have enjoyed free access to the domestic U.S. economy but major U.S. manufacturers have not enjoyed free access to theirs in return,' Lilley said. 'But under the conditions of membership in the WTO, China is committed to providing that free access. So American companies will be able to export and trade on far more level ground with China than they have been used to.'

Lilley said the troubled U.S.-Chinese relationship could now rebound from many of the crises that shook it this year, but only if economic relations remained the top priority. 'Mao Tsetung liked to say, 'Politics in command.' But the lesson of the past 10 days in Sino- American relations is 'Economics in command,'' he said.

"'The events of this week have established that the priority in U.S.- China relations is the economic success achieved in the WTO agreement,' Lilley said. 'Therefore we should work very hard over the next six months to establish that the economic dimension of the relationship remains priority number one.'" [End excerpt]

Still waiting.

Yeah, I'd say Mr. Lilley meets Lenin's definition of a useful idiot. IMO.

The "greatest generation" that refused to build the Soviets through "free trade" transfers of technology, wealth, and production were not useful idiots. They knew how to defeat enemies.

306 posted on 04/19/2005 11:44:39 AM PDT by WilliamofCarmichael (MSM Fraudcasters are skid marks on journalism's clean shorts.)
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To: WilliamofCarmichael

Lilley was right. US exports to China are up 265% since 1999. US imports from China are up 240%, so US exports to China have in fact grown faster than US imports from China.

http://www.whitehouse.gov/cea/mankiw_testimony_house_ways_and_means_oct_30.html

This is a piece from the CEA about the US trade picture, so you can get some useful context for your views of Chinese trade practices.


307 posted on 04/19/2005 1:04:12 PM PDT by babble-on
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To: Racehorse
Gosh, you are dense. Smith said that tariffs are acceptable in specific circumstances. To claim that it makes him a protectionist is the height of absurdity. What is with you guys, anyway? Have you never met a free-marketeer that believes in tariffs in the name of national security? Are you so accustomed to tilting at windmills, and arguments of your own creation, that you cannot see the obvious?
308 posted on 04/19/2005 2:53:29 PM PDT by 1rudeboy
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To: 1rudeboy

LOL

What messages have you been reading?


309 posted on 04/19/2005 3:11:28 PM PDT by Racehorse (Where your treasure is, there will your heart be also.)
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To: babble-on
Thank you for the link. I've been looking for some positive info besides "cheap" goods and the faith that the Chi-coms are converting to free market "capitalists" with freedom, liberty, and justice for all.

I am not being sarcastic. Some do believe (hope for) that.

I hope you are willing to look at such things as intellectual property theft (one example is the Chery automobile stolen from GM) and the requirement to transfer technology to Chinese state-owned enterprises "partners" in order to do business in China.

I have posted several times the possibility that "socialism with Chinese characteristics" and their path to socialism via controlling the free market could get the Chi-coms slapped silly by the Invisible Hand.

I became a "news junky" shortly after Mao's "agrarian reformers" took over China. I remember every "great leap" upon the backs of tens of millions of Chinese killing them.

When it comes to the Party keeping the Invisible Hand under control I think the Party can do it no matter how many lives it costs. That's just my opinion.

310 posted on 04/19/2005 3:31:37 PM PDT by WilliamofCarmichael (MSM Fraudcasters are skid marks on journalism's clean shorts.)
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To: WilliamofCarmichael
I've been looking for some positive info besides "cheap" goods and the faith that the Chi-coms are converting to free market "capitalists" with freedom, liberty, and justice for all.

Indeed, that was an informative link.  The full committee proceedings are linked below.  The second link is also rather informative.

Hearing on United States-China Economic Relations and China's Role in the Global Economy
Thursday, October 30, 2003

Monitoring China's WTO Compliance

311 posted on 04/19/2005 4:23:05 PM PDT by Racehorse (Where your treasure is, there will your heart be also.)
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To: Alberta's Child

I hate to break this to you, but the guy with the "McJob at Wal-Mart" today enjoys a standard of living that would be the envy of that unionized factory worker 30 years ago.


You are kidding....aren't you?


312 posted on 04/19/2005 4:43:07 PM PDT by cp124 (The Great Wall Mart)
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To: CSM
It's family income numbers that are discouraging. You may have a job (or three) but what income are you bringing home? Look at the explosion of consumer debt. That's a big clue family income is a problem.

Prices cannot be low enough for people who can barely afford to stay alive.

313 posted on 04/19/2005 4:44:35 PM PDT by NoControllingLegalAuthority
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To: Cronos

Wait till they start buying things from us that we don't make.


314 posted on 04/19/2005 4:47:34 PM PDT by cp124 (The Great Wall Mart)
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To: ninenot
There's no question that PRC also STEALS whatever they need to fill that market's needs, e.g., small engines, automobiles, etc.

Not true in all cases -- for instance, Intel is the largest chip seller in China for PCs and AMD is close behind. Chinese cars and bikes are, as you correctly pointed out, mostly cheap knock-offs. But they ARE cheap and have no quality, so many consumers still buy non-Chinese products because non-Chinese products give a better value for money -- even if they are more expensive. Note: I said non-Chinese, not American as I think GM, Ford etc. currently lag behind in quality and value-for-money as compared to the Japanese, Germans and now even against Hyundai and Renault.

However, since China has joined the WTO it HAS to follow some standards -- so we've got them by the uhm, indelicates and can FORCE them to maintain copyright standards.
315 posted on 04/19/2005 5:04:20 PM PDT by Cronos (Never forget 9/11)
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To: KC_Conspirator
Yes. But telecommunications is hardly a bubble economy

You are correct. GE was involved in getting the lowest price. I think the entire India option is good for basement coding. High-level design, analysis, Business and systems analysis, consultancy etc. can't be done by anyone offshore -- whether they be in India, Russia, Ireland, Canada wherever. WEll, not can't, but it would be difficult. But, basement coding (I do not know what you were working as so I will not assume it was of this type and I am NOT insinuating that it is) will go to India. Higher-lever (and I guess this would be your job) should ideally stay at home or have long-term consultants. I've met quite a few absolutely brilliant Indian techies, so I think they have it in them to work in various places in the software life-cycle.
316 posted on 04/19/2005 5:09:43 PM PDT by Cronos (Never forget 9/11)
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To: cp124
No, I am not kidding.

Check out Post #239 for some clarification. And then realize that the unionized factory worker from 30 years ago had a standard of living that would put him below the poverty line today.

317 posted on 04/19/2005 6:36:52 PM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: NoControllingLegalAuthority
Look at the explosion of consumer debt. That's a big clue family income is a problem.

You might have a point if you were talking about an explosion of consumer debt to pay for rent, groceries, and medical bills. However, this "explosion of consumer debt" is primarily the result of people living beyond their means.

Prices cannot be low enough for people who can barely afford to stay alive.

I would suggest that the phrase "people who can barely afford to stay alive" is utterly meaningless in a society where clinical obesity is one of our leading health problems.

318 posted on 04/19/2005 6:41:50 PM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: phil_will1
Here's a little quiz for you, AP. Who said "From each according to his means, to each according to his needs" Hint: his initials were KM.

The slogan describing the future communist society has nothing to do with the matter we discuss. Think harder.

319 posted on 04/19/2005 6:48:26 PM PDT by A. Pole (George Orwell: "In times of universal deceit, telling the truth will be a revolutionary act.")
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To: Cronos
Pretty similar to America's expansion -- similar but different.

Similar in a sense that both Germany and America used the protectionist policies at that time. England did otherwise and went down.

320 posted on 04/19/2005 6:50:31 PM PDT by A. Pole (George Orwell: "In times of universal deceit, telling the truth will be a revolutionary act.")
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