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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: Nephi

What needs explaining? Apparently, you have no trouble with our government picking winners and losers as a matter of policy.


41 posted on 04/18/2005 8:14:36 AM PDT by 1rudeboy
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To: ancient_geezer
We know that you are proficient in posting free trade html dogma, but can you refute the points that Buchanan made in his article?

Can you explain why globalist tax theory fails, but globalist trade theory holds?

42 posted on 04/18/2005 8:15:39 AM PDT by Nephi ("I am in favor of free trade." - Karl Marx)
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To: babble-on
So if we stop trading with China, they will become more politically free? Its worked great in Cuba, that's for sure.

We opened up trade with China, which had been dirt-poor before, and it is becoming wealthy. We haven't traded with Cuba, and it remains dirt-poor.

I would just as soon see all totalitarian states remain poor and relatively weak. In fact, although I don't think that it would have much impact now, I would still like us to stop "free" trade with China, whose government I think is a repugnant one.

It is not a government that we should be supporting in any way, and we certainly should not be making a bellicose, totalitarian state wealthy.

43 posted on 04/18/2005 8:18:22 AM PDT by snowsislander
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To: 1rudeboy
You can't explain your asinine assertion that tariffs are socialism, can you?

No, I don't have a problem with a trade policy that picks American producers to be the winners over foreign socialist producers. You do?

44 posted on 04/18/2005 8:19:18 AM PDT by Nephi ("I am in favor of free trade." - Karl Marx)
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To: Nephi

Can you refute the teachings of Thomas Sowell?


45 posted on 04/18/2005 8:19:37 AM PDT by mojojockey
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To: Nephi

"The US market is the market to be in for American producers or foreign producers."

That is true today, but China is growing at more than double our rate, has been doing so for more than a decade now and that is expected to continue for the foreseeable future. One of the big carmakers, GM I think, expects the Chinese auto market to be larger than ours by 2020.


46 posted on 04/18/2005 8:20:49 AM PDT by phil_will1
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To: mojojockey

Let's stick to this article, dissembler.


47 posted on 04/18/2005 8:21:19 AM PDT by Nephi ("I am in favor of free trade." - Karl Marx)
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To: hedgetrimmer
Lumber production is declining in the U.S. because the Canadian producers were smart enough to play the U.S. tariff game, and they've been kicking our @sses ever since. To make up for the increased cost brought on by the tariff, Canadian mills have spent the last few years improving their efficiency and extracting concessions from their labor unions. As a result, they've been able to make up for the cost differential and hold their own against U.S. producers.

(The predictable response by the U.S., of course, was to raise the tariff even higher -- but that only made things worse!)

More importantly, the improvements in productivity at Canadian mills made U.S. producers utterly uncompetitive in cases where the tariff doesn't apply -- like in export markets in Asia.

Your point about Santa Cruz County may be a valid one, but let me ask you this . . . your comment could just as easily apply to a manufacturing facility as to a forest, so what makes you think anything would be different in the manufacturing sector if the U.S. were to impose a tariff on Chinese imports?

48 posted on 04/18/2005 8:21:29 AM 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: Nephi
Under the Byrd Act, companies/industries that successfully petition our government to impose tariffs receive the monies collected in the form of a check. What's your definition of socialism?
49 posted on 04/18/2005 8:23:16 AM PDT by 1rudeboy
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To: phil_will1
One of the big carmakers, GM I think, expects the Chinese auto market to be larger than ours by 2020.

That should come as no surprise, considering that China's population is about four times larger than ours.

Here's a bizarre statistic for you . . . there are more people in China who speak English as a second language than there are native English speakers in the United States!

50 posted on 04/18/2005 8:24:04 AM 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

Are you suggesting that American made cars will fill China's demand? Or, is it more reasonable to assume that China will force car makers to relocate to China?


51 posted on 04/18/2005 8:24:44 AM PDT by Nephi ("I am in favor of free trade." - Karl Marx)
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To: A. Pole

All tariffs will do for us is allow the US Govt to keep our regulations high, keep taxes high, and take those once-cheap goods and put the tariff amount from your pocket into the government's. Do you want to pay more to our federal government ? I think paying over 40% now is a wee bit the reason why we cannot compete with some of these countries.

All Buchanan is advocating here is to increase the take of the federal government and a lower living standard for us all. You like paying double the world price for sugar, for example ? My first computer, in 1982, cost me $ 4000 without a hard drive (it had 2 floppies). Now ? Hundreds of times cheaper. Am I better off with trade ? You bet.

Von Mises will tell you, if you read him, is that those governments who subsidize their industries are making a wealth transfer from their nation to those they trade with.


52 posted on 04/18/2005 8:25:51 AM PDT by cinives (On some planets what I do is considered normal.)
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To: 1rudeboy

Oh, because the socialist Byrd corrupts the tariff system with kick-backs to companies, tariffs are socialist? 1foolboy?


53 posted on 04/18/2005 8:27:02 AM PDT by Nephi ("I am in favor of free trade." - Karl Marx)
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To: B-Chan
"Karl Marx loved the idea of Free trade. Anything Marx was for, I'm against."

Marx was not a believer in free trade, he was for it specifically because of his belief that it would aid in the destruction of capitalist societies. Therefore, if you think free trade will be harmful to our society, you and Karl Marx agree.

54 posted on 04/18/2005 8:27:07 AM PDT by Sam Cree (Democrats are herd animals)
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To: Alberta's Child

Asia market wiull be the next big thing for BC. I've heard they're making more money in asia than in the US.


55 posted on 04/18/2005 8:28:42 AM PDT by -=[_Super_Secret_Agent_]=-
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To: Nephi

No, you've convinced me. Tariffs are free-market capitalism. /sarc


56 posted on 04/18/2005 8:28:43 AM PDT by 1rudeboy
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To: cinives

Why don't you attack the regulations(and property taxes)and not the tariffs. They are substantially the reason why US goods cost more.


57 posted on 04/18/2005 8:29:29 AM PDT by hedgetrimmer
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To: Cronos
The British Empire was more or less static at that point. The only acquisitions the Brits made after that was durign the Boer Wars in SA. I'm talking abotu the diff between a growing nation and a mature one.

With the exception of characterizing Britain as a mature nation, I respectfully disagree.

The sun did not begin to truly set on the British Empire until after the turn of the century.  Probably, I would be safe in claiming the decline came part and parcel with WWI.  Britain declared war on Germany in the name of the Empire, but the individual dominions signed the armistice under their own signature and joined the League of Nations as independent States.

All through the 19th century the empire expanded.  It was pretty much a blooming flower for a very long time.

58 posted on 04/18/2005 8:29:58 AM PDT by Racehorse (Where your treasure is, there will your heart be also.)
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To: A. Pole

http://www.townhall.com/columnists/walterwilliams/ww20030827.shtml


59 posted on 04/18/2005 8:30:06 AM PDT by mojojockey
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To: Sam Cree

Democrats betray their labor ties because globalists have bought them off, therefore if you support free trade you have been bought off, too.


60 posted on 04/18/2005 8:32:20 AM PDT by Nephi ("I am in favor of free trade." - Karl Marx)
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