Still More On Trade
By Pejman Yousefzadeh Posted in 2008 | Barack Obama | Democrats | Free Trade | Hillary Clinton | Protectionism — Comments (20) / Email this page » / Leave a comment »
Yeah, I can't get enough of this stuff--too many smart people are writing pieces demolishing the Democrats' neo-protectionism for me to ignore it. So let's call up Dan Griswold to the karaoke machine so that he can sing his song:
In a bid to woo blue-collar voters in Ohio before Tuesday's presidential primary, Barack Obama and Hillary Clinton trashed free trade during their debate this week in Cleveland.
Sen. Clinton denounced the North American Free Trade Agreement (Nafta) as "flawed" and blamed it for closing factories in Ohio and upstate New York. Sen. Obama claimed that "if you travel through Youngstown and you travel through communities in my home state of Illinois, you will see entire cities that have been devastated as a consequence of trade agreements." Both pledged to withdraw the U.S. from Nafta if Canada and Mexico refuse to add "enforceable" labor and environmental standards.
But tinkering with a 14-year-old trade agreement will not bring an industrial renaissance to Youngstown and other Rust Belt cites. The relative decline of those regions dates back to the 1960s and 1970s, when the American economy began a transition from heavy industry toward an information-based service economy.
Ohio workers would pay a heavy price for pulling out of Nafta. Canada and Mexico are the top two markets for exports from Ohio, accounting for more than half of the state's exports in 2006. According to the Ohio Department of Development, 283,500 workers in the state earn their living in the export sector, with machinery, car parts, aircraft engines and optical/medical equipment among the leading exports. A trade showdown would put those good-paying jobs at risk.
Since Nafta took effect on Jan. 1, 1994, the U.S. economy has added a net 26 million new jobs. The average real hourly compensation (wages and benefits) of workers has climbed 23%. Real median household net worth has increased by a third. Of course, Nafta was not the primary driver of all that good news. But it is a useful counterpoint to the sense that large numbers of Americans have been "devastated" by Nafta and other trade agreements.
In recent years, U.S. manufacturers have enjoyed record output, revenue, exports and profits. Since Nafta, U.S. manufacturing investment in Mexico has averaged a modest $2 billion a year -- a tiny fraction of the $150 billion or more those same companies invest annually in domestic manufacturing capacity. American factories actually added a net half-million new manufacturing jobs in the five years after Nafta.
Facts are stubborn things and Griswold rolls out the facts like heavy artillery. Don Boudreaux--who referred me to the Griswold piece--put his own thoughts to pixels as well. Check them out.
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Still More On Trade 20 Comments (0 topical, 20 editorial, 0 hidden) Post a comment »
I'm so glad to know that you have been able to pick up the pieces and put your life back together. You and your kids deserve all the happiness in the world and I know your sweet wife would want no less for you all.
Aside from oil, steel, and who knows elsewhat ... America has a real problem with "free trade." And we are not exactly rising to the occasion.
Now, a day in Texas is not complete until a visit to Walmart. And there I went, this eve.
My frozen cauliflower was hecho en Mexico ... the broccoli was "product of Guatemala" ... at least the 88-cent bag of hushpuppies (because I'm too lazy to roll cornmeal) was "made in Alabama!"
I can understand the seasonality of vegetables (get 'em where they grow 'em), but the guy ahead of me in line was goin' fishin' ... and he bought three ha-pints of "Canadian Nightcrawlers!
If America can't grow its own worms, we're doomed!
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
We lost all low wage manufacturing such as textiles and plastic extrusion to foreign competition, and a lot of steel production as well. But the kind of machine manufacturing that occurred in places like Ohio was lost to other states, primarily Tennessee and Texas, where many auto parts and industrial engine plants are located.
In my city there are hundreds of job listings for anyone who can work a machine lathe or weld.
"Nothing works like freedom, Nothing succeeds like liberty"
Kyle
This is choice. Clinton and Obama are trying to out-isolate one another by promising that Northeastern Ohio will return to its thrilling days of past industrial glory if only people would elect them.
Even if that did happen (pixie dust dreams), then with both of their stances on immigration, the jobs would all be filled by illegals who would have drivers licenses and benefits and who would work for half the union wage.
Duh? Hello?
It's appalling to see the wholesale betrayal of US sovereignty treated as though it were a sacred plank of the conservative platform. Au contraire. The Democrats are more conservative than McCain on this one. Evidently RedState is pandering to the left now.
Since Nafta took effect on Jan. 1, 1994, the ....average real hourly compensation (wages and benefits) of workers has climbed 23%.
With a calculator, you can calculate that works out to an annualized increase of 1.5% per year in wages and benefits over the last 14 years.
1.5% per year is less than the rate of productivity increase in the U.S. economy, which was relatively high due to the advent of the Internet and widespread personal computers. Which means that those productivity gains are yielding most of their financial benefits for somebody else.
Guess who. They're producing benefits for the CEOs and other executives of the American corporations, and benefits for the rapidly rising standard of living of our trading partners.
Let's remember that Clinton and Gore gave us NAFTA. NAFTA has ravaged our industrial base and has caused our trade deficit to explode. I'm with Duncan Hunter on this one: NAFTA should be repealed or drastically retooled:
John Hawkins: What about CAFTA or NAFTA along those same lines?
Duncan Hunter: Well, with NAFTA, Mexico also has a rebate system for their producers. So if you want to operate tax-free, you go to Mexico. You create products and you ship them back to the US and you get your taxes rebated to you and you ship them back into the US.
So, and incidentally, on NAFTA, I led the debate against NAFTA on the Republican side in '94. The proponents said, "Listen, we have a $3 billion trade surplus with Mexico. It's one of the few countries in the world in which we have a trade surplus," and here are their words, "Let's build on that." We passed NAFTA and the next year we went into a $15 billion trade deficit and we've never come close to coming out of it. So what they predicted didn't happen. They also predicted that we would build a middle class in Mexico that would buy more washing machines and Cadillacs; that never happened. They also predicted that the illegal immigration problem would be solved; that never happened and they also predicted that the problem with massive drug trafficking into the US would be solved; that never happened. (http://rightwingnews.com/interviews/duncanhunter.php)
NAFTA is not "free trade," either--it's government-managed trade that puts our manufacturing companies at a disadvantage so that un-patriotic multinational corporations can make bigger profits.
http://ourworld.cs.com/mikegriffith1/trade.htm
The GOP's adoption of the Clinton-Gore trade policy is disappointing and runs contrary to the party's roots, which were strongly "protectionist"--and very successful.
Mike Griffith
Let Freedom Ring website
http://ourworld.cs.com/mikegriffith1/id47.htm
then many wouldn't want to be called conservative.
You can go stick with the route of free-market encomonics of else decide that trade needs to be regulated by policians. You won't find many rich nations that way, nor many free ones.
How about making it easier to move a factory overseas and sell the products made by the factories without tariffs for cheaper than the factories in, say, Ohio can make them because Ohio's factories are forced by the government to allow things like 'bathroom breaks' and have amenities such as 'railings'?
Hey, I'm a Libertarian on trade... but "protectionism" has upsides.
There's also the whole "let's say we needed to build 10,000 tanks in the next 10 months... would we be able to do it?" thing.
We were able to do such a thing in the 40's... would we be able to do it today without outsourcing production to Japan?
Man is free at the moment he wishes to be. --Voltaire
neither we nor the Japanese have that kind of steel capability. The Koreans might.
I've tried to address this issue here as well to general approbation or dismissal. Nobody in America should have to work in third world working conditions just to be able to compete with the third world. Sure some of our mandated or union contracted conditions may be over the top, but I sure as Hell don't want a return to 19th Century sweat shops or to emulate the conditions in much of Asia. Out sourceing and offshoring are not the unalloyed good that our free trade friends make them out to be.
In Vino Veritas
It's natural in a global economy that certain tasks are performed where it is cheapest. I'm all for holding companies to account for ensuring acceptable standards in their foreign operations, but at the end of the day do you want say that GAP has to sell T-shirts mad in Ohio costing £40? And how many people in Ohio want to work minimum wage making T-shirts?
Protectionism is not about helping American workers. It's about corporate welfare for well-connected corporations and a small benefit for a few workers in the USA in return for a greater cost of living for many more and lost opportunities elsewhere.
since the designer brands moved their manufacturing to China and Vietnam.
You can't afford the price of free corn.
and other minimum/minimal wage jobs. I do care about machine tools, heavy manufacturing, and high-tech. These things have serious implications for our sovereignty and national security.
In Vino Veritas
Too many here seem to forgo our national security here for monetary gains...
Formally known as Deagle... "Golf is a way of life..."
Remember who signed NAFTA? Wasn't his name Clinton? NAFTA is the one main reason I can't say that everything he did was bad. And now his wife is bashing it? Why didn't she stop him from signing it? After all, we know who wears the pants in that family. (Bill is always dropping his.)