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.
It's obvious that real wealth comes from producing goods,not consuming them.We are transferring billions of dollars of American wealth to China in exchange for worthless trash.To make it even worse we are borrowing money at a record pace to continue sending it to China for those goods.The benefit from free trade goes directly to the corporation who uses it to prop up its bottom line.This nation was built using tariffs and it will be destroyed by removing them and allowing cheap goods to be dumped on our markets.
1smartboy /sarc
"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!"
Yes, China's size is on a scale that is hard for most of us to grasp. Here's another statistic. It is believed that China's actual population is around 1.5 billion, as opposed to the official government census of 1.3. That means that if China's margin for error in counting its population were a country all its own, it would be the 4th largest in the world, larger than the UK, France and Germany combined.
Agree with the regulations bit, but disagree with the property tax bit. Many corporations have negotiated their property taxes down to nill. Refineries have done this in the Phila area because they claim their land is worth nothing due to environmental regulations and pollution laws.
Yes - if we do nothing about the cost of outgoing goods (including taxes, regulations etc) and we put tariffs on incoming goods, we will be worse off in all cases.
If that's the case, then Buchanan is only covering part of the problem. In addition to imposing tariffs on imported goods, we must also eliminate all forms of domestic Federal taxation -- including the income tax, payroll taxes, etc.
I've got a deal for anyone who calls themselves a patriotic protectionist . . . we'll impose whatever tariff you'd like on foreign imports, but only if we eliminate all other Federal taxes at the same time.
"Are you suggesting that American made cars will fill China's demand?"
No, that was not my intent. I was using cars as an example because that is one industry that I am aware of making such a forecast. I was referring to your post
"The US market is the market to be in for American producers or foreign producers."
Global taxation would be a top down system, while free trade is nothing more than capitalism applied internationally. In other words, free trade is not something imposed by a world government, but the opposite. It means merely that businesses and individuals are allowed free use of their own capital.
That being said, the whole question of free trade is kind of academic, since it can only exist between free countries with free markets, and there are not very many of those.
Additionally, IMO, the question of national security has to be looked at - farming out all our heavy industry to foreign countries makes us vulnerable.
However, I do believe that free trade is generally beneficial for the same reasons that the free market is beneficial.
Buchanan cites facts, you respond with free trade dogma mingled with fear. Is that the best you can do?
"The US market is the market to be in for American producers or foreign producers."
Apparently, it is for China, too. Have you seen the trade deficit the US has with China?
Strictly speaking, the empire did not end until Hong Kong was turned over to China in 1997. Britain was still adding new territory to the empire through the 1890s.
If they don't play by the rules, why should we ?
A 27% tariff might cause them to re-consider.
BUMP
In free trade, capitalism is used to subsidize economies that would otherwise fail if left to their own markets.
In other words, free trade is not something imposed by a world government, but the opposite. It means merely that businesses and individuals are allowed free use of their own capital.
How so? Free trade organisations and treaties are the stepping stones to world government.
Free how? Try buying an American made tv, vcr, windshield wiper, spark plug, asparagus, etc. Nobody uses those items anymore, right? On top of losing the freedom to buy those American made goods, now those former workers are free to work at WalMart. Hooray!
Uh, you must have missed this from the article
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.
We do not have trading partners...A trade partner is someone you trade with...That doesn't mean money on one side, goods on the other...
This question, and all relevant variations, is what the free traders do not grasp. An American manufacturer of farm equipment is not doing business simply a Chinese agricultural enterprise. He is doing business with the Chinese government. The imbalance becomes all the more clear when the American manufacturer learns the Chinese have cloned his equipment and are selling it under their own brand.
A point worth considering when talk of the burgeoning car market in China is heard.
$55 oil might cause them to re-consider, too. Once China decided to peg its currency to the dollar, they lost any control they might have had over their own currency. When the U.S. dollar declines against the Euro, the Chinese yuan declines against the Euro even if there is nothing in the Chinese economy that would otherwise cause such a decline.
By offering tarrifs as the solution, aren't we asking that the quality of life for Americans be lowered? In reality, this article proposes lowering the purchase power of Americans, therefore harming our citizens in every day life. If there is such a connection between the trade deficit and employment, why is the unemployment rate not affected?
Or the success of the steel tariffs....
By definition.
"Free how?"
Free to use one's money as one wishes, to employ whom one wishes, to buy from and sell to whom one wishes. That's freedom. Freedom, in my view, is freedom from government. Your view of freedom, in which you have freedom to buy products that are not competitive in the free market, is a view of freedom that requires, at some level, government coercion, direction and supervision of its citizens. As does any form of government guaranteed standards of living.
It reminds me of a conversation I had with a leftist artist who complained our country was not free since he was not free to follow his dream of being a full time artist. In other words, his art was not competitive, so for him to be "free," he required government to make it so.
"Free trade organisations and treaties are the stepping stones to world government."
I don't recognize the validity of the above statement. If there were one government, and it was one dedicated to freedom, one can imagine that it would allow a free market. OTOH, if it were operated as are most of the world's governments, it would be the opposite, based at some level on Central Planning.
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