Cost of US 'free' trade: collapse of two centuries of broadly shared prosperity

[ProfessionalLeftist]

It’s time to face a brutal truth about the American economy: Even if rising gas and food prices don’t hasten a double-dip recession, our 200-year tradition of broadly shared prosperity is over.

That’s because the great American job machine has been destroyed by a reckless free-trade policy.

Since the end of the cold war, and accelerating after NAFTA in 1994, Washington has pursued a globalized economy made possible by ever-expanding “free” trade agreements. This policy is a major factor in America’s increasing inequality, our rising indebtedness, community abandonment, and the weakening of the industrial sinews of our national security.

The good news is that this global order of free trade is about to crumble – within the next 10 years at most. The unsustainable American trade deficit alone makes this a near-certainty.

MORE...

http://news.yahoo.com/s/csm/20110401/cm_csm/373900;_ylt=Ah1p9BK9KJtvRu8C.rnFhl_9wxIF;_ylu=X3oDMTJjNHE2bzg5BGFzc2V0A2NzbS8yMDExMDQwMS8zNzM5MDAEcG9zAzcEc2VjA3luX

[HereSince1628]

1. Yep. It sure has trickled down...

and down and down and down.

[jwirr]

2. I think it would have been over in the Great Depression if it had not

been for the regulations FDR and others put on capitalism. There was a real threat of communism back then.

[Hydra]

17. It would have been over

And it SHOULD have been over. FDR simply prolonged the inevitable. Capitalism will kill us if we don't get red of it.

[jwirr]

18. Unfortunately I agree with you but that does not stop me from loving

FDR. I was born during his terms.

[Hydra]

19. Not my era

FDR, while he may have taken the wrong path, did what current Presidents are too scared to do- he took the people who were raping society and told them to keep it in the lines. I respect that kind of courage, even if I think what he did wound up being a 70 year bandaid on a problem that isn't going away.

Still, it's unreasonable of me to think that we could have gone from what we'd done since the Revolutionary War to something fair and just...but the opportunity was there, even as it is there today.

[reggie the dog]

21. highly reglated capitalism is actully not bad

look at Denmark, Finland, Sweden, Scotland, Germany, Belgium, the Netherlands and France as examples. You reglated banking and business, tax the wealthy 50 percent or more of their income, and provide a social welfare state including good retirement, unemployment, and health care for the people. At the same time we get to have the kind of goods we want and are also free to create a company if we have an idea and want to work for ourselves.

[Hydra]

25. Sure- but how do you keep it highly regulated?

It was supposed to be highly regulated here, but the beast always wins.

Besides, we don't need a profit based model to have innovation and options. If that's what we really want, we build the system from there. Currently, most of the stuff I can buy isn't as innovative as some of the free projects out there. Sad commentary, that.

[reggie the dog]

27. unionize and strike often, it is a constant battle

[Hydra]

28. Why battle the beast?

Someone I was discussing with even admitted that in the European countries that socialism forms the solid backbone required for capitalism's destructive tenancies.

Why don't we just do it right instead of trying to keep the leaky boat afloat?

[OHdem10]

3. Is there anything we can do to push the collapse so possibly

we can get onto improving America'S lot??

[Sen. Walter Sobchak]

4. If free trade is the problem why doesn't all of Western Europe look like Camden N.J.?

No the problem is not Free Trade, the problem is when faced with deindustrialization the US stood dead still in a changing world, followed by jamming out to John Cafferty songs and eventually just shaking our fist at the sky in anger at the closing of the last plastic cutlery factory in the state. While Europe went into overdrive to build high value-added industries.

It is ironic because Europe built these modern industries out of a terrible fear that an American industrial hegemonic force was going to crush European industry. If you can read French find a copy of Le Defi Americain by J.J. Schreiber. Just replace every instance of the word France with America.

[Elwood P Dowd]

7. Their trade policies are totally different than ours.

They have a VAT on our exports plus government subsidies that put US products at a major disadvantage. I've sold US manufactured products to Western Europe and the tariff plus the VAT is often over 25%. The exact same type of product manufactured in Europe and shipped back into the US has a tariff of 2-3% and no VAT. It's even worse in Asian countries.

The problem is that OUR so called "Free Trade" agreements are not really "Free Trade". They are outsourcing/investment scams masquerading as "Free Trade". Ours are designed strictly to benefit rich executives and Wall Street investors, ship millions of middle class US jobs to countries paying slave wages, bypass environmental, labor, and product safety laws, and pocket enormous profits and investment rewards in the process.

[Sen. Walter Sobchak]

10. We should, but we don't have free trade with the EU,

The average tariff on US (I think Canada might be included) and EU trade is about 3%, and VAT is hardly a trade barrier. It isn't the Europeans fault the US doesn't have a national-VAT any more than it is their fault the US doesn't have universal healthcare. Canada and Mexico both collect VAT on imports in the same way Canada at 5% and Mexico at 15%.

It isn't the same internationally as buying something from Amazon to avoid state sales tax.

In the case of the European Union goods that are imported for resale can have this VAT refunded, it is then subsequently collected at the point-of-sale from the final purchaser.

[Elwood P Dowd]

11. A free trade agreement with Europe will be just as bad as the rest of 'em.

It will be written by corporate/investor lawyers to benefit their class at the expense of the rest of us. US workers will lose again.

[Sen. Walter Sobchak]

12. Oh yeah, I see that!

American businesses dripping wet for a third-world workforce are just going to be dying to build in Toulouse France where you can't find a soul willing to work in any professional capacity for less than the equivalent of $70,000 and five weeks of vacation.

[Elwood P Dowd]

13. Never underestimate the new and innovative ways our corporate crooks can find to steal money.

It could be a money laundering deal that benefits the fat cats on both sides of the Atlantic, and they call it something nice and cute with a Free Trade name thrown in as a selling point. Unless the corporate fat cats can make a shit pot full of money, there will be no free trade deal with Europe.

[Taitertots]

14. What works for Western Europe isn't certain to work for Eastern N.J.

Why was the US faced with De-industrialization in the first place? The "changing world" was changes caused by "free trade". While we sold out our industry, Europeans protected their industries.

[Sen. Walter Sobchak]

15. We signed out first (real) free trade agreement with in 1987 with Canada

Prior to that the our only Free Trade Agreement was with Israel.

So how exactly does one blame de-industrialization that had significantly run its course prior to Free Trade on Free Trade?

De-industrialization (defined as a permanent decrease in manufacturing as a share of employment) has occurred across the entire developed world (including Japan, Korea and Taiwan) everyone faced de-industrialization - the Europeans confronted it head-on, we ignored it until it was too late to do anything relevant about it. Labor intensive manufacturing diverged in two forms either automating or off-shoring (although early on in the US "off-shore" was usually the deep south). It is also an interesting point because the first jobs from the US to be offshored enmasse were non-union textile jobs in the South.

The Europeans identified the industries in which they could remain competitive without sacrificing their quality of life or labor standards. It was also a matter of prioritizing scarce post-war resources. And those industries they have dominated with fixtures like Airbus, Thyssenkrupp or BASF. America just stood around arrogantly believing we were unbeatable until we had been pummeled within an inch of death and then decided to hitch our wagons to the "service industry" and various ponzi schemes.

America could have done the same, indeed it was the official policy of the Johnson administration (as was trade agreements such as the Autopact) but we didn't and now we suffer the consequences.

[pampango]

16. Well said. The progressive countries in the world have more trade than the US, not less.

What makes them progressive (and promotes an equitable distribution of income and a strong middle class) is not restricting trade but in having relatively high levels of (progressive) taxation, strong safety nets and labor unions, and more effective regulation of corporations and the finance industry.

It's easier in many ways to blame our problems on Mexicans or Chinese or Indians. Kind of lets us off the hook. "What can we do. We can't compete with that kind of poverty." (Ignoring the fact that Europe, Canada, Australia, Japan and other progressive developed economies do precisely that.)

Since Reagan the US has done exactly the opposite of what Europe, Canada, et. al. have done. We have turned a progressive tax system into a regressive one, shredded our safety net, weakened unions substantially, and deregulated corporate America. It should be no surprise that by doing the opposite of Europe and Canada, we have suffered from a very inequitable economy and a declining middle class. To change this doesn't require bashing foreigners, but confronting those Americans who are behind these destructive policies.

[RB TexLa]

24. Don't let facts get in the way of a nationalistic take care of our own kind rant

They're about to get their You! ... Ess! .... Aaaa! chant going!

[misanthrope]

5. This is what angers me so much about hearing Clinton ballyhooed...

...Many of us could see this handwriting on the wall 20 years ago. Ross Perot tried to be as plain-spoken about it as possible but he was a little nutty so everybody just smirked and turned away.

Free trade has gutted America, just as warned. Remember Clinton courting the WTO, doing the corporate song and dance as protesters took to the streets and were derided by the public at large?

Both parties are guilty in this one. One might be a bit dirtier, but they're both to blame.

We're in a world of hurt and it doesn't look to be getting better any time soon.

[ProfessionalLeftist]

6. I'll never forgive Clinton for NAFTA

NEVER.

[Donnachaidh]

20. thank you -- there's a special place in hell for the Nafta Pushers

ALL of them.

[reggie the dog]

22. me neither

[Armstead]

8. And that is why the blind defense of Obama cheeses me off

Unfortunately, Obama seems determined to push for even more of the same.

You'd think we'd have learned by now....But still any attempt to point out the fallacy of Corporate Free Trade is slapped down as far left naivete

[Elwood P Dowd]

9. 80% of the Dems in congress voted against NAFTA.

Almost all of the repukes voted for it. Besides Clinton/Gore, you had traitors such as Bill Richardson, Bill Bradley, Tom Foley, and Bob Matsui just to name a few.

[upi402]

26. Roll Call has it as 40% Dems voted FOR NAFTA

Is this result invalid?

Nafta:
Republican 132 43
Democratic 102 156
Independent 1
TOTALS 234 200

That's 102 Republicans in the party THEN. Now it's far worse.

[upi402]

23. The damn unions, taxes, and regulations

err, uhh... nevermind.