http://www.slate.com/id/2205186/
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and an equally partisan and clearly non-reassuring response ...
(snip)"Amity Shlaes, a senior fellow at the Council on Foreign Relations, penned an August 18 Washington Post column examining five of the government's Depression-era mistakes that made financial matters worse. Shlaes, author of "The Forgotten Man: A New History of the Great Depression" cautioned today's lawmakers against following in those footsteps.
According to Shlaes, "perverse monetary policy was the greatest cause of the Great Depression." But there were five other mistakes in the 1930s that some politicians today seem ready to repeat.
1. Giving in to protectionism
2. Blaming the messenger
3. Increasing taxes in a downturn
4. Assuming bigger government will bring back growth
5. Ignoring the cost of inconsistency
"The proximate danger today is a repeat of the 1970s, not the 1930s. But if lawmakers don't remember the old missteps, they might find that their new recovery legislation imperils our recovery," said Shlaes."(snip)
So far, president-elect Obama has announced clear plans to repeat at least three of those 5 mistakes ... protectionism, tax increases on US businesses and business owners, and expanding the government.
Yeah, I'm not sure what to predict at this point.
We should protect our country from hemorrhaging billions and billions of dollars a year in trade deficits I can tell ya that. It's like trying to fill a pail with a hole in the bottom.
I don't believe in protectionism, I believe in fair trade (not free trade). For US auto's to be exported into Japan, there is a tax (100+%), but very little the other way around. France doesn't allow nonFrench companies to invest in/ build power plants. So why do we allow them to invest/ build here.
It's give and take. Also, it has to be looked at IMO on a country to country basis. How can we really expect equal import-exports between the US and, let's say, Jamaica. As long as trade is fair, that is all that matters.
^^ I've stated this in other threads here. So I'm interested to the see the opinions of other conservatives on your post.
IMHO, there really isn't any feasible middle ground i.e. 'fair trade'. You must either allow a free trade system to operate, or you must enact a regulated system where every imported item is evaluated (and tariffed) by the gov't in regard to 'fairness'. The former obviously results in the lowest prices for US consumers and thus the highest standard of living for all Americans (on the average). The latter arguably results in fewer US jobs being lost ... at the cost of significantly higher prices for US consumers and thus a lower standard of living for all Americans (on the average).
The 'fair trade' argument, with political overtones removed, basically boils down to the US gov't determining the reasons behind production cost differentials between imported goods and equivalent goods produced in the US. Those production cost differentials are obviously what is allowing foreign made goods to be imported into the US and sold at prices which are significantly lower than the costs to produce equivalent goods in America. To point out just a handful of examples you've got the US minimum and/or union wage, US restrictions against cheap coal fired electricity, US environmental and worker safety regulatory compliance costs, US product liability / litigation costs etc.
The real motivator behind 'fair trade' is for the US to create a new gov't department which will attempt to quantify these cost differentials and impose a tariff at the US border which bridges the gap in production costs. This has been looked at by Washington, who arrived at a figure of 27% as the average cost 'premium' which US manufacturers face versus Chinese competitors. Their method of equalization would be to enact a 27% tariff on all Chinese goods imported into the USA to 'force' Chinese manufacturers to pay similar costs as US manufacturers. However, this also guarantees a 27% price increase at WalMart.
In reality, such a tariff effectively takes money out of the pockets of US consumers (via higher prices on US store shelves for imported goods), and puts it in the pocket of the gov't. In reality, paying a 27% tariff does not stop the use of dirty coal fired electricity by Chinese manufacturers, nor does it increase wages or benefits for Chinese workers. It also does not improve wages or benefits for American workers ... although arguably it would slow down the rate of American job loss to 'outsourcing'. However, the 'price' paid to retain the American jobs comes in the form of a 27% retail price increase which must be paid by all Americans with a resulting reduction in every American's standard of living.
it hasn't come in ... yet. But for certain the Dep't of Commerce would have to add thousands of new analysts and bureaucrats in order to enact and operate a tariff system based on 'fair trade'
Fair trade is fair fair trade, you charge high tariffs, we charge high tariffs. Ban us, we ban you. Pretty simple. This whole other stuff, is other stuff, not fair trade.
They've tried for an environmental tax for sometime, but because it's been bundled with 'fair trade' doesn't make it a real part of it. Even the wage differential is crap. Just the unions adding crap to the issue. It doesn't make it a real part of the issue.
Free Trade makes a country's work force vulnerable to another trading country which finds ways around the former's cost structure--wages, pollution and safety controls, farm subsidies, etc. As a result of this built-in 'inequity' and resultant shift of manufacturing jobs (due to multinationals or corporate associations), the low prices for imported goods can in fact LOWER the standard of living for the former country. This is so also because shifts in manufacturing come about much more rapidly than the shift of the labor force training in reaction to it, as well as the rate of innovation leading to the newer products for which the new jobs will be created. After all, there are just so many products that Walmart can sell to people who are out of good jobs.
Fair Trade, on the other hand, has been a politically reluctant imperative for this country. Possibly due to the difficulty of regulation, or to political will, or even to retribution from trading partners. Every single product would not have to be evaluated, but classes of products and auxiliary products (eg not all LCD TV set models and the necessary repair/replacement products). But this would be needed by the trading partners as well. Farm product subsidies, which are done to stabilize producers/markets against weather forces, also would have to be modified to be price-neutral. Further fair trade wouold tend to equalize standards of living, in time, seems to me. Which is not a bad thing. But I agree that equalizing tariffs going to the government for whatever general 'slush' fund, does not seem to be the best use for those funds. I know one country would have a hard time forcing another to develop equalizing working conditions (wages, pollution and safety controls, etc.), but somehow that equalizing tariff seems not right, considering inequality of the trading partner's working conditions.
These are just a few thoughts not expressed above.