Three Cheers for Free Trade

The American Specator ^ | March 16, 2016 | Ross Kaminsky

[Cincinatus' Wife]

Donald Trump and his fellow liberals Hillary Clinton and Bernie Sanders are lambasting free trade as the scourge of the American working man. How odd it is that an economic activity so beneficial to almost every American, indeed to the vast majority of the human race, suffers such attacks with only half-hearted defenses raised by politicians who should know better and economists who do know better.

I stipulate: in trade, as in any economic endeavor, there are losers in the short run. Capitalism is, after all, fundamentally a system of creative destruction. But if there is any area of agreement among economists of all political stripes — a group among whom finding agreement is exceptionally difficult given their unique decision-making anatomy — it is that free trade provides large net benefits to the societies that engage in it, even if other nations do not lower trade barriers to the same degree.

Furthermore, the benefits of trade accrue in large measure to the lower economic echelons of society in an extension of Schumpeter’s profound observation that “the capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.”

Allow me to offer a few quotes (emphasis added) from one prominent economist, at the time a professor at an elite university, who was lamenting the poor understanding of international trade in the United States:

[Cincinatus' Wife]

met·a·noi·a ˌmetəˈnoiə/

noun: metanoia

change in one's way of life resulting from penitence or spiritual conversion.

[Clintonfatigued]

BOO!!!!!!

[Hawthorn]

>> Whose interests are served when a foreign country — whose citizens have a much lower standard of living than ours — taxes those citizens to subsidize major industries ... that sell manufactured products that the workers who make them cannot afford ... to American consumers at a steep discount? <<

American consumers benefit big time. It’s one of the first things you’ll learn in Economics 201.

[weston]

Here’s a nice little article on Trade and where the candidates stand
http://www.eagleforum.org/publications/column/candidates-turn-against-trade-deals.html#.Vul74UPH2cQ.twitter

[stephenjohnbanker]

BOO !!

LOL

My Senator Jeff “Flake” is an open borders sholl for AZ agricultue. He won’t vote for Trump. Big news...LOL

[amihow]

Thanks. See if you can apply that definition to Trump.

The word actually has a broader meaning of changing one’s mind. It is not always spiritual, but often is. Hope that is case with Trump.

[FunkyZero]

I’m not telling you that you have to like it. I’m just telling you... we live on a planet, and it isn’t planet America anymore like it used to be. Asia is stomping us and we have to compete with that, whether we like it or not. Life sucks

[AntiScumbag]

Trade as a percent of GDP was < 5% in the early 1930’s

Wrong, as usual. Trade was NOT less than 5% of GDP in 1929. GDP was then 104.6 billion. Exports were 5.9 billion. Imports were 5.6 billion.

http://www.bea.gov/iTable/iTableHTML.cfm?reqID=9

"Trade" was about 11.5 billion. That's about 11%, not "less than 5%."

In 4 years trade fell to 2 billion of exports and 1.9 billion of imports. 3.9 billion total. Down almost 70%.

As I pointed out to you here: http://www.freerepublic.com/focus/f-news/3406938/posts

I guess you can't be bothered with any numbers which make you look like a fool.

Thanks, Smoot-Hawley for dragging the economy down much further than it would have otherwise have fallen! Good job, tariffs! Take a bow, protectionists!

Now it is $3.5 Trillion out of $17 Trillion = 21%.

Wrong again, trade is not now 3.5 trillion, that's the 70% damage that could be done to trade by your protectionist nonsense.

Trade now totals a little over 5 trillion and GDP is about 18 trillion, not 17 trillion. How do you manage to get every single number wrong? It's amazing.

What's funny is that you are now using my 3.5 trillion damage number that could be done by tariffs. Apparently you are confused. I'm not surprised.

And 5 trillion in total trade (exports plus imports) is 28% of GDP, not 21%.

So, yeah, it's a big difference. It's a much bigger and more important difference than you think. Thanks for making my point. Again.

[Trumpinator]

We have no need to import these from China. It was a choice not a necessity.

[Alberta's Child]

See my previous post on this.

Am I supposed to lose any sleep because Chinese taxpayers/peasants are basically subsidizing discounted prices for American consumers?

[Alberta's Child]

I know that. I was asking the question rhetorically — as in, “Why would China even do something this stupid?” LOL.

[GOPsterinMA]

He’s a tool. Shocker...

[Impy]

Three cheers for taxes!!!

Proudly agree with 80% of democrats!

Hip hip.......

[1rudeboy]

We don’t have free trade with China, for starters.

[Pelham]

http://www.econstrat.org/publications/books

CONSIDER THIS: while China’s number one export to the United States is $46 billion of computer equipment, the number one export from the U.S. to China is waste $7.6 billion of waste paper and scrap metal.

Clyde Prestowitz reveals the astonishing extent of the erosion of the fundamental pillars of American economic might beginning well before the 2008 financial crisis and the great challenge we face for the future in competing with the economic juggernaut of China and the other fast-rising economies. As the arresting facts he introduces show, the U.S. is rapidly losing the basis of its wealth and power, as well as its freedom of action and independence. If we do not make dramatic changes quickly, we will confront a painful permanent slide in our standard of living; the dollar will no longer be the world’s currency; our military strength will be whittled away; and we will be increasingly subject to the will of China, Russia, Saudi Arabia, and various malcontents.

But it doesn’t have to be that way. As Prestowitz shows in a masterful account of how we’ve come to this fateful juncture, we have inflicted our economic decline on ourselves we abandoned the extraordinary approach to growth that drove the country’s remarkable rise to superpower status from the early days of the republic up through World War II. For most of our history, we supported our home industries, protected our market against unfair trade, made the world’s finest products leading the way in technological innovation and we were strong savers.

But in the post-WWII era, we reversed course as our leadership embraced a set of simplistically attractive but disastrously false ideas that consumption rather than production should drive our economy; that free trade is always a win-win; that all globalization is good; that the market is always right and government regulation or intervention in the economy always causes more harm than good; and that it didn’t matter that our factories were fleeing overseas because we were moving to the “higher ground” of services. In a devastating account, Prestowitz shows just how flawed this orthodoxy is and how it has gutted the American economy. The 2008 financial crisis was only its most blatant and recent consequence.

It is time to abandon these false doctrines and to get back to the American way of growth that brought us to world leadership; Prestowitz presents a deeply researched and powerful set of highly practical steps that we can begin implementing immediately to reverse course and restore our economic leadership and excellence.

The Betrayal of American Prosperity is vital reading for all Americans concerned about the future of the economy and of our power in the coming era.

[nathanbedford]

Big difference.

Actually not such a big difference:

The Smoot-Hawley Tariff was more a consequence of the onset of the Great Depression than an initial cause. But while the tariff might not have caused the Depression, it certainly did not make it any better. It provoked a storm of foreign retaliatory measures and came to stand as a symbol of the "beggar-thy-neighbor" policies (policies designed to improve one's own lot at the expense of that of others) of the 1930s. Such policies contributed to a drastic decline in international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934. More generally, Smoot-Hawley did nothing to foster trust and cooperation among nations in either the political or economic realm during a perilous era in international relations.

http://future.state.gov/when/timeline/1921_timeline/smoot_tariff.html But let's accept your assertion which absolutely ignores all the knock on effects of such a tariff policy, that is, the knock on damage to every other sector as country after country lines up to retaliate and the businesses which support the protected sector fail in sequence.

The increased percentage of trade carrying the United States economy today is all the more reason to keep an economic ignoramus. Off our free enterprise system. The problem is not the stupidity of our negotiators but the ego of Donald Trump.

Donald Trump's approach is egocentric and unavoidably uneven. On this thread I have pointed out that it is our regulatory scheme which causes as much damage as our trade posture. If one thinks the man who declined to call for the end of biogas subsidies in Iowa, (he rather called for their increase!) will not pander to special-interest groups, one simply cannot read headlines.

If one places faith in such a man to courageously restructure the trade system on a fair basis one is valuing hope well above experience. If one expects the likes of Donald Trump to negotiate our way through the minefields of international trade one is simply deluded.

[FunkyZero]

Ok you win

[sargon]

Donald Trump needs to do one thing, and one thing only: get elected.

That single watershed event will send the entire DC Establishment howling and screaming "bloody murder" into the night.

President Trump and his advisors will be able to handle US trade policy without embracing abominations such as the TPP, and without TPA hopefully as well.

Nothing could be more important than shaking the DC status quo to its core. Nothing.

And all of your sugar-coated protestations can't change the fact that the Establishment clearly sees no bigger threat to their existence than the election of Donald Trump.

Maybe the Left/Mass Media/GOPe will focus their attention on Ted Cruz if they succeed in blunting Trump's candidacy.

Ted Cruz had already played the race card (!), and then, last Friday night, he gave nothing but a lip-service rebuke to organized Left wing thugs who criminally infringed on the Peoples' Right to Peaceably Assemble, simply because it wasn't his rally that got canceled.

Instead of showing statesmanship, leadership, and the proper emphasis, Ted Cruz criticized the thugs in passing, and then went on to spend twice as much energy trying to blame Trump.

What he should have done is forcefully and fiercely repudiated the lawlessness fomented by the organized totalitarian Left.

Ted Cruz has exposed himself as a naked political opportunist who is perfectly willing to carry the Establishment's water, inasmuch as he has mimicked their unprincipled tactics in an all-out effort at character assassination against Donald Trump. That is shameful.

You yourself, with all of your eloquence and erudition, have been engaging it the same thing: relentless, hysterical, all-out character assassination against Donald Trump.

Donald Trump is surely a flawed candidate, but he categorically is not the evil, slavering demon which you and your ilk so vehemently portray him as.

Quite frankly, Trump supporters have had quite enough of the caricatures and the relentless hatred and distortions.

Ted Cruz will not be the Republican nominee for President of the United States, and, quite frankly, that's his own fault.

Donald Trump brought many important issues to the fore, and he endured vicious attacks as a result.

Ted Cruz did not lead on these issues; so Trump seized the initiative, and he has not relinquished it. Nor will he as long as he is standing.

I'm going to vote for Donald Trump, warts and all, I'll do it with a clear conscience, and I'll sleep easily at night, secure in the knowledge that I remain a conservative, despite you and your ilk who insist otherwise.

If, somehow, Ted Cruz wrests the attention of the electorate away from Donald Trump, then I will support him as the nominee.

Ted Cruz has faltered. He has been acting more and more like a typical politician, using typical tactics, and acting in predictable ways. I thought he was better than tat. I was wrong.

Go, Trump, go!

[combat_boots]

I want to see J and K street buildings with For Rent signs and a slew of U-Hauls heading out of DC. Used clothing stores packed to the gills with business getups. An array of Rolex, Prada, Christian Dior and Armani on eBay.

Let it get HALVED. All of it.

[nathanbedford]

You yourself, with all of your eloquence and erudition, have been engaging it the same thing: relentless, hysterical, all-out character assassination against Donald Trump.

It is quite apparent that I have gotten under your skin but that has never been my intention, rather my intention has been to get you to think, to think about what you are doing to the country if you install this man in the White House.