Posted on 10/29/2002 9:26:41 PM PST by sixmil
In August, the U.S. merchandise trade deficit – the value of goods we import, less the value of the goods we export – hit $42.3 billion, an all-time record for any nation. Our merchandise trade deficit is now running at $507 billion a year, nearly 5 percent of America's Gross Domestic Product.
For every $1 billion in exports, Presidents Bush I and Clinton used to remind us, 20,000 jobs are created. A $507 billion trade deficit means 10 million production jobs lost to American workers. No, free trade is not free.
Watching television the other night, I saw my friend and colleague Larry Kudlow chuckling over the trade deficit. It means we get all those TV sets and cars other people make, laughed Larry. On another channel was a lengthy report about Hathaway Shirts closing its last U.S. plant, in Waterville, Maine.
That same day, Goodyear announced it is shutting down a Lincoln, Neb., plant and replacing its U.S. workers, who earn $18 an hour, with Mexican workers, who will earn $12.77 a day. By dumping the U.S. workers, Goodyear is slashing payroll by 91 percent.
Well, as ex-Budget Director Dick Darman said about U.S.-made computer chips, "If our guys can't hack it, let 'em go." That is the Spirit of the Caryle Group. And, yes, we have been letting them go.
A third of our steel is foreign made, an even larger share of our cars, half our machine tools and almost all our shoes, shirts, radios, televisions, cameras, telephones and VCRs. At Tyson's Corner, Mall of America and Southland shopping centers, U.S. consumers relish their range of choices. Do they know what it is costing their country?
Since U.S. trade surpluses disappeared in 1971, writes ex-GM executive Gus Stelzer, we have run $3.5 trillion in trade deficits, and the national debt has soared from $408 billion to $6 trillion.
Is there a link? You bet. You don't need a Ph.D. in economics to know that every product carries in its final sales price the full cost of the taxes imposed on the company that made that product.
Stelzer estimates that 50 percent of the sticker price of a new Cadillac goes for taxes. That includes the sales tax, Social Security and Medicare taxes of GM workers, federal and state income taxes withheld from wages, GM's corporate income tax and the property taxes GM pays. When you buy an American-made car, you are contributing to Social Security and Medicare, and to our national defense and national parks, and helping pay for the local police, public roads and public schools.
This is why exports are better than imports, why trade surpluses are better than trade deficits. When foreigners buy U.S.-made goods, half the price they pay underwrites the cost of our government. But when we buy foreign goods, we contribute taxes to the regimes in the countries where those goods are produced. Keep that in mind the next time you buy goods "Made in China."
Free-traders cheer that tariff rates have fallen to almost zero. What they do not understand is that all taxes are tariffs on production. "An income tax is a tariff, so are property, payroll, sales and every other tax," writes Stelzer. Why? Because all taxes are factored into the final sales price.
Now that tariffs have been virtually abolished, foreign-made goods carry almost no U.S. tax. But goods "Made in the USA" carry U.S. taxes of 50 percent of their price. Free trade thus makes a mockery of equal protection of the laws.
Free trade, writes Stelzer, "is the only competitive activity in which the rules are not the same for every competitor even though the lives of millions of people ... are involved. No other competitive activity would tolerate such immoral and unconstitutional double-dealing." This unjust system will one day kill U.S. manufacturing.
Once, our farms and factories produced virtually everything we consumed, and we had no income tax. Manufacturers were the geese that laid the golden eggs. Free trade is now slaughtering the geese.
While conservatives wear Adam Smith ties, they ignore his wisdom:
When the necessaries of life have been taxed in any country, it becomes proper to tax not only the necessaries of life imported from other countries, but all sorts of foreign goods which can come into competition with anything that is the produce of domestic industry.
Adam Smith believed in a level playing field.
Elite America no longer believes that, and because it doesn't, Middle America is losing its access ramp to the American Dream.
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None of the Bushs know anything about economics. If they do, the are intentionally attempting to subvert the economy into a world-wide economic parity. Anything beyond easily repeated slogans and platitudes is beyond their capacity.
Bubba, on the other hand, should be considered armed and dangerous. He has a few more functioning brain cells and has been determined to destroy this nation for more than 30 years, His economic statements are part of that goal.
With this collection of goofs this nation will be reduced to being a third world conquered country in 15 years.
In 1980, the US share of output had dropped to 23%.
In 2000, the US share had increased back to 29%.
Gosh, that "evil" free trade of the past twenty years is really destroying our economy. Yawn. Buchanan's mangling history and economics once again.
From: A miracle begins to emerge in the Russian economy
Soviet-era managers have been replaced, companies have been restructured and into the arena have stepped a new generation of businessmen, often in their thirties, who deemed the making of money by entrepreneurship rather than asset stripping and corruption the preferable road to take. Interestingly these capitalists have not taken the path many western advisers advocated, building up small businesses as in Poland. Instead, they are working at developing heavy industry, building sizeable conglomerates that use the cash generated by oil or metals businesses to invest in manufacturing companies that they bought at knock down prices after the crash. Although ruthless in sacking over manned workforces most of them have leant support to Putin's plans for radical tax reform and judicial reform. They tend to be pro Western and open to bringing in Western managerial and technical expertise.
And the Russians own it all themselves:
From: Russian economy forges on as confidence stays strong: Violent siege leaves business unfazed
Russia's burst of economic growth over the past three years has been driven by local businessmen upgrading oil and metals companies acquired in the 1990s after the collapse of the Soviet state. Foreign investment has played little part in the action.
But isolation and trade barriers is not the answer.
How can you be so flip about the destruction of the manufacturing base of this nation and the destruction of the middle class working people?
Also, unless you work for the government, hire illegal aliens, or rob banks, your job is a potential loser.
When I hear these tales, and the cavalier statements of some, I am reminded of the old poem or story of Hitler and the Jews. How the writer didn't care because they didn't come for him, time after time, until they did come for him and there was no one left to care.
I do not believe the figures someone posted about our production, but won't argue. The sad thing about what we do still produce, it is being done by illegal aliens that pay no taxes, have to be cared for by the remaining workers.
There is no win in this for America - maybe for a few - but I just don't understand anyone being so smug about fellow citizens loosing their jobs and way of life.
But Hey!! We are destroying the unions, right? Not!!! They unions are courting the illegals right and left.
Oh, its not Free Trade that's slaughtering the geese.
This is the Esau Economy. Like Esau in the biblical story, these cowards are selling out their birthright for a “mess of pottage.” Carpe diem is their motto, but destruction and death follows in their wake. They are feasting on the carcasses of companies built by generations of investment—investment of not just money, but lifetimes of hard work. The original owners birthed the companies and nursed them into the giants of industry that this great country was once renowned for. The parasites who run them today don’t have any understanding of the businesses which they “operate.” They don’t even care.
And neither does the American public. They want a 401k plan that is secure from risk and yet pays a return equal to the riskiest derivative fund. They want cheap imports and lower taxes along with increased government spending on their pet programs. They want businesses (and those rich business owners) to pay for everything and they want to be employed at a “living wage” with regular cost-of-living increases. They want jobs, but they don’t want all those dirty industries in their back yards. They say they want to “buy American,” but they are not willing to pay one penny more to keep their neighbor employed.
It is not the “government"; it is not the evil businessmen; it is not even the wretched educational system. It is every one of us. We are enslaved to our own bellies. We have preferred safety to liberty, excess to investment and sloth to industry. We can still change course, but how will we respond? We are raising a generation who will either restore or annihilate the Republic. The choice is ours.
Thanks for posting it.
Buchanan is right again. Our trade deficit is pushing the country closer to collapse. Just a few weeks ago, President Bush conceded that our economy was in ships off the shore of California.
The government-to-government deals by both the Clinton-Bush administration were not free. Only lobbyists knew the deals that were not even seen by our elected reps.
These phony 'free trade' agreements just increased our deficits. The negotiation should be simple 'WE BUY FROM YOU - YOU BUY FROM US'. Deficit gone, job economy restored.
In 2000, the US share had increased back to 29%.
Gosh, that "evil" free trade of the past twenty years is really destroying our economy. Yawn. Buchanan's mangling history and economics once again.
Please help us enderstand how US share of world output has anything to do with trade deficits. The 2000 figure is pretty interesting, but I'm betting on another thread you criticize the fake economy of Clinton and Enron. How does that 2001 figure look? Maybe a chart showing all the years in between would be more useful.
I thought "free" trade was supposed to benefit us all. Did you move the goalpost a little closer? You pit one American against another and then scratch your head everytime voters hear the class warfare rhetoric and go vote for democrats. When we went from agrarian to industrail, we did not ship agriculture overseas, we used industry to improve agriculture. Likewise, we should not abandon industry in favor of information. Instead the information age should be used to automate industry, which we should keep here. BTW, would you rather pay income taxes or import taxes? Hint - you don't have to file for import taxes.
Heresy!
What is? This is not isolation or trade barriers IMO, unless you mean isolating ourselves from the WTO. A 10-15% tariff (Pat's plan) or a floating rate to balance trade (my plan) could hardly be considered a barrier with resepect to other taxes. Gasoline - 100%, Sales - 9%, Income - 25%, Capital Gains - 30%, Cigarettes - ?
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