“Bring back American jobs.”
To the founding fathers free trade meant freedom to trade with any nation, company, or individual. It did not mean open markets.
During the 1800’s the US maintained high tariffs to protect its developing industry from low cost European manufactured goods imports. High tariffs resulted in the US creating the largest and most productive industrial economy on the planet. With that protected economy the nation developed a huge middle class.
The loss of middle class jobs has been a direct result of the decision by government and private industry to deindustrialize the nation over the past 25 years. Opening up the US domestic market to competition from third world labor has resulted in the flight of capital out of the US, the loss of the diversified manufacturing base and supply chains essential for national security and economic security, as well as the corresponding loss of middle class jobs. We are now seeing the second phase of this loss as R&D centers, and their high value jobs, are being moved to the locations of manufacturing.
Currently our consumer driven, and government entitlements transfer driven, economy is spending down our national savings and borrowing to the limit of our credit line in a desperate effort to maintain the standard of living afforded by a healthy industrial economy.
We still have a very limited window of time to raise tariffs back to historical levels and see renewed investment in domestic manufacturing. If we wait until we’ve spent our national savings and seen our reserve currency status disappear, we will be just another third world country with a small elite class ruling over impoverished peasants. Our choice today is to produce our way back to prosperity or borrow our way to poverty. The same rules that apply to individuals apply to nations.
Another excellent post.