Why FREE TRADE was never the answer.

self | 7/28/03 | RaceBannon

[RaceBannon]

There has been a few threads on here where Free Trader enthusiasts have defended their view, and have been responded to by those who feel that Free Trade is not helping the American Economy, in fact, is part of the reason we are NOT going to see a great recovery any time soon.

I am one of the latter. The following is a cut and paste job, taken from my own comments on these threads, which I feel tell my side of the story.

Some of the points are repeatd, 3 and 4 times. That is because I feel they are the forgotten reasons and ideas why we are in what I believe are dire economic straits.

Feel free to comment.

[FITZ]

Look how government subsidizes the health care industry ---and it's one of the only successful industries remaining. That and agriculture. I'm not sure what others are still successful at all.

[clamper1797]

Free Trade would be good if it were really free trade BUT when one does business with countries that engage in slave labor or pay near slave labor wages and others whose government subsidize their markets you have anything BUT free trade

[CWOJackson]

Yes, that would explain how the price of the Ford Tarus dropped so dramatically in 1990 after the government imposed tariffs on it's main competition (the Accord and Camry) to level the playing field.

No, that's right. The prices of the Accord and Camry just went up, the quality of the Tarus still remained low (compared to the price being demanded) and the government didn't cut corporate taxes because of the tariffs they were collecting on the Accords and Camrys.

[clamper1797]

You know my opinion Race ... it's pretty much the one you got ...

[CWOJackson]

You are more in favor of "some trade restrictions" not so much opposed to free trade. That's a different animal and not one I'm necessarily opposed to.

[CWOJackson]

"Barring corruption, tariffs are not set up in favor of a specific business..."

Thank God our business leaders and Congress people are above corruption!

[Light Speed]

One question..says the Wiseman on the mountain.
Who benefits from Free Trade first?
Who is so powerfull..that they govern the flow..and remain unseen in the assay of the workings?

Answer...Insurance..and Re-Insurance.

How many of you failed the test?
Don't feel bad...its hard to see a thing which has a cloaking device to cover its movement in the space of Fiscal reality.

The U.S. Insurance and Re-Insurance are tied to the Grand Parents from Europe...first Uncles are all Bankers.

Its comical..the Insurance companies are the ones who now lobby for [Chip technology] standardization..they are the principle backers of what will appear in phases..this will occur in most of the modern world.
If you are allready choked to near death by the Insurance protocals..federal/state law ties..you will not like the future.
Soon..your life history on every level will be known..whatever choices you make to enjoy your life..will have Insurance slotted first in your fiscal handling.

Insurance Groups are now becomming full blown banks.
They used to be Banks out the back door...now they are free legislatively to pursue economic dominance.

A friend asked me once who I thought built the Pyramids in Egypt.
I answered...probably Insurance companies of the day.
And hey look..they are still Pyramiding to their hearts content : )

[jayef]

I'm not sure why people always make this argument. Are you really convinced that subsidized companies will do better than completely private companies in the long run? You might want to think about who you call a Marxist.

[RockyMtnMan]

Except people were willing to buy Accords and Camrys over the Taurus because they were superior products worth the differrence in cost. They lowered their prices because the demand for Honda and Toyota prodcuts were higher than Ford products.

People had more money in the nineties and were willing to spend a little more for a better engineered product (many of which are built in the USA, where the Taurus is built in Mexico).

How do you know they didn't give Ford some kind of Tax assistance?

[CWOJackson]

The Camry and Accord were superior products and were also about 20% cheaper until tariffs artificially increased their prices to the same level as the inferior Tarus. And the Camry was being built in Kentucky when this happened.

So the government imposed a tariff on a superior foreign product made is this country, to prop up an inferior American product made in Mexico.

Yes, the government needs to be in the tariff business.

[FITZ]

Are you really convinced that subsidized companies will do better than completely private companies in the long run?

All the completely private tool and die companies being put out of business because our government tries to destroy the small businessman aren't going to be around to "compete in the longrun". China's government actively supports and promotes it's businesses. It wants the jobs and the money from trade.

[RockyMtnMan]

But didn't Ford get the message they need to build a better car if they want to compete? It's a benefit that Ford is forced to compete and produce a better car which in theory should be cheaper. In the short term we pay the bill, in the long term it levels out and we have more options at competitive prices. Trade is not static, it happens over time.

There can be no Free Trade because "trade" implies negotiation. If you truely believe in Free Trade I'll trade you a Honda Accord for a Aston Martin.

[american spirit]

Brilliant Race and after seeing some of the responses it's amazing how much rectal/crainial inversion can exist on one thread.

[CWOJackson]

"But didn't Ford get the message they need to build a better car if they want to compete?"

Not at all, they got the message that all you need to do it get a couple of your paid for key Congress people to place a tariff on the competition.

[RockyMtnMan]

So we chuck tariffs because of government corruption? Simple fact is, we need tariffs to protect industry from the preditory nature of other governments.

Unfortunately we need an honest government even more than we need tariffs. It's sort of a cart before the horse type of problem. Without responsible leaders we're screwed no matter what the real solution is.

[Willie Green]

Not at all, they got the message that all you need to do it get a couple of your paid for key Congress people to place a tariff on the competition.

Not at all, they got the message to establish offshore production facilities and acquire foreign automakers and import materials and components, undercutting their domestic suppliers while plundering the American Middle Class market.

[CWOJackson]

"Unfortunately we need an honest government even more than we need tariffs. It's sort of a cart before the horse type of problem. Without responsible leaders we're screwed no matter what the real solution is."

Exactly, the first preditory government I'm worried about is our own. We don't exactly have a good track record when it comes to corporate executives and Congressional leaders working together for a common good. That "common" doesn't include you or me very often.

[CWOJackson]

"Not at all, they got the message to establish offshore production facilities and acquire foreign automakers and import materials and components, undercutting their domestic suppliers while plundering the American Middle Class market."

The only problem is at the time the Tarus was being built in Mexico already and the Camry in Kentucky.

[nunya bidness]

Sowell is longwinded and overly impressed with himself. I have "The Vision of the Anointed", and read it.

Let's face it, you're a long-winded self-appointed guardian of truth who is litigating the Catholic Church for personal fortune and all the while raising concern over hot-button issues.

Or in other words just another lawyer.

What makes you so special? Self appointed guardian of the FreeRepublic Network? Maybe not.

[underbyte]

"What our rulers are doing is "suicidal trade". The end game is global socialism"

RaceBannon's assessment is 100% correct I live in the CT valley and the first thing you notice driving up RT 8 are all the vacant factories.
Ever see the Trim Nail clippers? I know the guy who inherited the factory from his father. had to move the operation overseas.
My wife's cousin used to cast all the manhole covers for the state of R.I. - He now imports them from brazil. I can relate a whole plethora of examples add infinetum

I own a couple of companies. One is an IP house which develops new air movement related technologies. When I started my marketing for licensing I contacted 400 US fan companies and had no takers. the only licensenses I could get were two Japanese companies, one chinese and one french(I know, I know- Certainteed) Compaq is my only US Licensee and they still manufactured the product in China.

$12.00 per unit to manufacture in CT. $2.00 in Taiwan. There are no US companies that can compete anymore on multiple levels. There were some Hightech startups , in the early eighties IBM, GE and some communications companies etc. here in CT but almost all have closed their doors.

Developing computers, transistors on silicon and associatd technologies took the better part of two generations. It took massive goverment & private investment. The best and brightest in our industry and universties devoted their careers to it. Our capital markets financed it. Hundreds of billions, maybe trillions of dollars in today values over time.

WE GAVE IT ALL AWAY in the span of less than ten years. That was our future and it's not coming back. And Quantum computers will not replace it for another 50 years

People are going to look back in a few years and realize that without being aware of it the biggest transfer of wealth in history was engineered right under our noses. Trade deficits of $500 billion is "suicidal trade", what we are doing is not called free trade or even fair.

The economic climate has deteroriated to the point where it now has it's own inertia. My other company due to the economics makes it impossible to manufacture my products in the U.S.A. ! Trust me I can not do it.

Suppose it costs $10,000 for a personal computer as the free traders argue that the consumer would lose without the free trade bussiness. My thinking is if we kept the technology at home and exported $10,000 computers all over the world we would probably be rich enough to think $10,000 was not all that much money. 1000 euro's to the dollar anyone?

The US became what it is(was) from DAY one through export and fair trade. That's how we became rich, The whole world bought our products without socialist style subsidies. Imagine that!

I have posted these comments in one form or another but RaceBannon's rant is an important one, fundamental to our freedoms and as he has pointed out, insidous in it's nature and depth.

I believe in the rank and file American worker and people who refer to them as whiners and tell them to take a couple of classes to upgrade their skills are plain out of touch.