Free Trade vs Protectionism (help me out here)

[specsaregood]

and I can ask again, what's wrong with not knowing how to fish if he never needs to?
Sure, its a big IF, but WHAT IF?

Why would one never need to?

Perhaps you are the person that likes to live at the mercy and/or charity of others, however; I am not. And I prefer my country to not be that way either.

 

[Becker]

Why would one never need to?

Perhaps you are the person that likes to live at the mercy and/or charity of others, however; I am not. And I prefer my country to not be that way either.

Just because I don't need to do lots of work, does not mean it must be at the mercy, expense, or charity of others. But yes, if I can, without consequences, why not?

My hypothesis, is that automation technology will make labor less necessary, and thus a person can survive, or even live well, without hunting and fishing on his own. This doesnt necessarily mean it comes at another person's expense.

 

[limepickle]

specsaregood, the problem is that you are suggesting that no one does any work if we don't have manufacturing. We still work by doing service jobs and managing our investments overseas. But if you want to talk about the principle, it's not as if we don't have the ability to fish- we have the ability but other people are just giving the fish to us for free.

 

[low preference guy]

Why would one never need to?

dude... you're responding to WaltM. that might hurt your rep count.

 

[low preference guy]

What would happen if tariffs are increased in a nutshell:

1. Prices will raise immediately and the standard of living will go down.
2. The flow of trade will stop for some goods and that will have consequences even after freer trade is restored. So even if we have sound money at some point in the future the ceasing of trade will have some consequences then. Reestablishing trade routes takes money and time.
3. The government will print even more money to do the same things the government does now, as the price of everything increases.
4. As a consequence of the printing of money, the business cycle will accentuate in America and more local industries will go bankrupt due to miscalculations induced by the increased money supply. This will increase unemployment and make goods even more expensive.

 

[showpan]

What would happen if tariffs are increased in a nutshell:

1. Prices will raise immediately and the standard of living will go down.

No sir, prices have gone up since NAFTA, this happened almost over night. The standard of living in this country has been decimated and the quality of goods has been reduced to shit.

2. The flow of trade will stop for some goods and that will have consequences even after freer trade is restored. So even if we have sound money at some point in the future the ceasing of trade will have some consequences then. Reestablishing trade routes takes money and time.

The flow of manufacturers back into this country will create the jobs we once had. The flow of goods would barely see a bump. This country was built into the biggest industrialized nation on this planet using tariffs and the most recent example would be Brazil who in less than 10 years went from the very bottom of the worlds economies to the #5 spot today. After NAFTA was passed, this country lost aver 4 million jobs and over 400 farms in a little over 1 years time. The losses continue to mount and today we find that over 25 MILLION Americans need a real job, not some crappy Walmart or McDonalds low paying SERVICE job. It takes less than 1 year to bring a manufacturing plant into full production.

3. The government will print even more money to do the same things the government does now, as the price of everything increases.

The price has increased because of NAFTA, so your point is? Printing money is an entirely different subject.

4. As a consequence of the printing of money, the business cycle will accentuate in America and more local industries will go bankrupt due to miscalculations induced by the increased money supply. This will increase unemployment and make goods even more expensive.

Yes, the printing of money does make everything expensive. What you have failed to point out is the fact that 100 years of futures regulations were wiped out in 2000 with Clinton's Commodities Act. While regulated, futures speculation accounted for less than 30% of the market. Today it accounts for over 80% as companies like JP Morgan who lease more oil tankers than Chevron owns buys up all the oil and lets those tankers sit full at anchor until the prices are artificially raised. This is happening for almost everything we buy, especially food. The increased unemployment is due to companies getting huge tax breaks for leaving.

Economics 101: We live in a consumer based economy. Without decent paying jobs, we can't consume.

 

[Jtorsella]

No sir, prices have gone up since NAFTA, this happened almost over night. The standard of living in this country has been decimated and the quality of goods has been reduced to shit.



The flow of manufacturers back into this country will create the jobs we once had. The flow of goods would barely see a bump. This country was built into the biggest industrialized nation on this planet using tariffs and the most recent example would be Brazil who in less than 10 years went from the very bottom of the worlds economies to the #5 spot today. After NAFTA was passed, this country lost aver 4 million jobs and over 400 farms in a little over 1 years time. The losses continue to mount and today we find that over 25 MILLION Americans need a real job, not some crappy Walmart or McDonalds low paying SERVICE job. It takes less than 1 year to bring a manufacturing plant into full production.



The price has increased because of NAFTA, so your point is? Printing money is an entirely different subject.



Yes, the printing of money does make everything expensive. What you have failed to point out is the fact that 100 years of futures regulations were wiped out in 2000 with Clinton's Commodities Act. While regulated, futures speculation accounted for less than 30% of the market. Today it accounts for over 80% as companies like JP Morgan who lease more oil tankers than Chevron owns buys up all the oil and lets those tankers sit full at anchor until the prices are artificially raised. This is happening for almost everything we buy, especially food. The increased unemployment is due to companies getting huge tax breaks for leaving.

Economics 101: We live in a consumer based economy. Without decent paying jobs, we can't consume.

NAFTA is not free trade.

 

[showpan]

NAFTA is not free trade.

I never stated NAFTA was free trade? NAFTA did however remove and or reduce most tariffs to almost nothing therefore our current economic condition is a perfect example of what happens when tariffs are eliminated.

 

[Knighted]

I never stated NAFTA was free trade? NAFTA did however remove and or reduce most tariffs to almost nothing therefore our current economic condition is a perfect example of what happens when tariffs are eliminated.

Your analysis is flawed. NAFTA was introduced in 1994. What followed was about six years of incredible economic growth. I'll be the first to admit though that NAFTA probably played only a small part in that, since the economy was simply swept along with the tech boom. That aside, the point is that trying to blame NAFTA for the state of the economy 17 years after its introduction just does not compute. Correlation does not mean causation. There are a million factors affecting the economy, and instead of considering any of them, you've honed in to blame NAFTA alone for all of the economy's woes. That makes about as much sense as liberals saying that since the economy tanked after Bush's tax cuts, the tax cuts caused the recession.

 

[TomL]

Your analysis is flawed. NAFTA was introduced in 1994. What followed was about six years of incredible economic growth. I'll be the first to admit though that NAFTA probably played only a small part in that, since the economy was simply swept along with the tech boom. That aside, the point is that trying to blame NAFTA for the state of the economy 17 years after its introduction just does not compute. Correlation does not mean causation. There are a million factors affecting the economy, and instead of considering any of them, you've honed in to blame NAFTA alone for all of the economy's woes. That makes about as much sense as liberals saying that since the economy tanked after Bush's tax cuts, the tax cuts caused the recession.

Six years of incredible economic growth? Since 1994? For who?

 

[showpan]

Six years of incredible economic growth? Since 1994? For who?

not for middle class America, that's for sure. The only ones who have profited are those who own shares. The tech boom created another problem. Because of NAFTA, and the subsidized sell out, H1-B visa's were used as an excuse to bring in more unskilled workers who had to be trained by their American counterparts only to later be fired. Our economic problems are a direct result of NAFTA. Companies were payed to move as tariffs were eliminated. This has had a trickle down effect in which those jobs that once averaged $18 per hour were eliminated and only a small percentage of them were replaced with low paying service jobs (making Big Macs). This has had a devastating effect on local, state and federal governments who have been forced to cut back. Not that this is such a bad thing in context, the problem is that they have fired teachers and raised our taxes while advancing the police state. The big push to screw up our education system in order to privatize (corporate profit) what once was the leader now has become an obsession of the NWO. Globalization by the NWO is nothing more than their idea that share prices and profits are valued higher than human life itself. The effect this has had on our economy is monumental. We have lost over 10 million decent paying jobs which also supported small business and local government. Just as many more jobs were lost because of this and the monopolies that have been created have left us with a standard of living that will soon resemble that of a thrid world country, with third world wages and third world education system.

 

[Steven Douglas]

Our economic problems are a direct result of NAFTA.

That's like saying that someone with AIDS died as a direct result of a cold. If you want to get at the heart of our economic problems, you are going to have dig a LOT deeper, and go back a LOT further, than NAFTA.

 

[visose]

Devaluing a currency is similar as getting a pay cut. You'll get hired more frequently (exports) but you have to work more hours to buy the same things (imports). Well, its not exactly like this. It's more like if your whole neighborhood decides to get a pay cut at the same time. Sure you are making less but your tailor is now cheaper so its not that bad. But not all things are made in your neighborhood, for example, you need oil to transport almost anything, and the guys selling the oil are outside your neighborhood and didn't agree to any pay cut, so prices also increase somewhat in your locally produced products and services and lot in imported products.
The mainstream argument for devaluing a currency is that economists argue that prices are "sticky downward" and a country's population isn't going to voluntarily decide to get a pay cut at the same time.

 

[TomL]

not for middle class America, that's for sure. The only ones who have profited are those who own shares. The tech boom created another problem. Because of NAFTA, and the subsidized sell out, H1-B visa's were used as an excuse to bring in more unskilled workers who had to be trained by their American counterparts only to later be fired. Our economic problems are a direct result of NAFTA. Companies were payed to move as tariffs were eliminated. This has had a trickle down effect in which those jobs that once averaged $18 per hour were eliminated and only a small percentage of them were replaced with low paying service jobs (making Big Macs). This has had a devastating effect on local, state and federal governments who have been forced to cut back. Not that this is such a bad thing in context, the problem is that they have fired teachers and raised our taxes while advancing the police state. The big push to screw up our education system in order to privatize (corporate profit) what once was the leader now has become an obsession of the NWO. Globalization by the NWO is nothing more than their idea that share prices and profits are valued higher than human life itself. The effect this has had on our economy is monumental. We have lost over 10 million decent paying jobs which also supported small business and local government. Just as many more jobs were lost because of this and the monopolies that have been created have left us with a standard of living that will soon resemble that of a thrid world country, with third world wages and third world education system.

That is pretty much the way I see it. But there are other trade agreements that has contributed to the problem as well. That is why my economic plan http://www.ronpaulforums.com/showthread.php?332918-My-Economic-Plan deals with the trade imbalance, which some call protectionism. Why is that everything that will help this country is called protectionist?

 

[Steven Douglas]

Why is that everything that will help this country is called protectionist?

Could it be in the way you define both "help" and "this country"? Just a thought, given that it is virtually impossible to meddle with the aggregate without picking winners and losers.

 

[TomL]

Could it be in the way you define both "help" and "this country"? Just a thought, given that it is virtually impossible to meddle with the aggregate without picking winners and losers.

In any of my writings, how am I picking winners and losers?

 

[Salvial]

The solution to runaway globalization is localization. You need to foster a strong domestic economy that can keep capital circulating healthily throughout a country. Once workers aren't burdened by not being able to keep minimum wage up against inflation and excessive taxes, full domestic employment may not be necessary - if the value of one's work was able to afford a decent standard of living for his entire family, for example. Imagine if YOU had double the money in your pocket!

LOCALIZE - shop at farmer's markets, support small independent stores, domestically made goods, buy from local farmers, start city gardens, trade on craigslist/ebay, produce a good or service, etc. - it's an extremely important step in all this.

 

[Steven Douglas]

In any of my writings, how am I picking winners and losers?

Where do I begin? I wanted to state that I am a loser for having my own individual liberty - the untrammeled freedom to come and go as I please - taxed. But let's take on just one from your list:

5. Congress should levy tariffs on all goods coming into the United States to recuperate lost revenues due to the elimination of Capital Gains and Corporate taxes.

Firstly, I don't care about lost revenues for Capital Gains, which are often tantamount to "inflation taxes" (paying for the privilege of having your currency devalued by an already hidden tax). That one is not always about profits anyway, and is already a tax that picks winners and losers.

Furthermore, levying a tariff on foreign goods coming into the United States gives an artificial incentive for American interests not be as competitive. I don't see that as a good thing at all, or anything but damaging - especially in the long term. It sounds good on paper, as it appears on the surface only to choose winners and losers on the manufacturing side, but the additional loser that you left out is the CONSUMER.

In addition, you will have incentivized (as we have done so many times in the past) those on the foreign side to a) devalue their own currency to remain competitive, and/or b) slash their own prices (offer a sale and accept less, even long term) to make themselves more competitive, and/or c) work all the harder to make a superior product which is naturally more competitive despite the difference in price. In reality, it is a combination of all the foregoing, and then some. They don't just sit back and take it. AND, you don't have control over the amounts or tariffs they will NO DOUBT put up in return, to try and make up the artificial difference with one that is equally artificial on their part.

 

[showpan]

The losers right now are all of us (99%). Go to any dept store and you are very limited by the choices between cheap crap and even cheaper crap. None of it is made here. Since NAFTA, so many companies have closed that it would be impossible to list them all. Not only have those manufacturers closed, the businesses that once supported them have closed. The suppliers, restaurants, mom and pops, and a host of others have been closed and in their place sprout up Walmart and McDonalds who get their supplies from overseas along with their government subsidies and huge tax breaks for supporting them. Again, the losers are ALL of us, or at least the 99% of us who have no choice but to shop at these places. The winners...the 1% who own them and another small percentage who own shares. Most Americans do not own shares. The globalists have already picked the winners and it ain't us!! Again, NAFTA has eliminated competition, eliminated 1/4 of this countries jobs and prices have almost doubled. While other factors such as devaluation of our currency, wall street deregulation, and a host of other things all designed to turn us into even bigger losers, the main problems right now are, NAFTA, nation building, the FED and a supreme court that should be tarred and feathered. Globalization is nothing more than the reality that share price and profits are worth more than human life and the ability for someone to live the American dream. They are now destroying 1000's of homes that went into foreclosure just as they leveled many of the vacant factories that once made this country strong. Corporate fascism is being advanced and they have accelerated their plan to dismantle the middle class so that we are weak and desperate. Our military is now supplying cities and towns with a lot better hardware than we have. Americans who are hungry, homeless and desperate will welcome whatever scraps they throw and won't question them for fear of getting the boot from their hand out programs. We are now heading down the homestretch and it doesn't look good for us. While shopping at farmers markets and searching for made in USA should be something we all do, stocking up on ammo would be prudent at this point. They will have bought themselves a little more time by extending the unemployment benefits. Once those finally run out, FEMA camps will be a reality for a lot of folks.

 

[Steven Douglas]

showpan - what all those corporate interests had in common, more than anything else, was not NAFTA. They were doing just fine without NAFTA, and everything was already made overseas long before NAFTA. "Made in Japan" eventually became "Made in Korea" which eventually became "Made in Hong Kong or Taiwan", which became "Made in China", which is now becoming Made in Vietnam, India, Mexcio, Indonesia -- you name it. If an otherwise impoverished country develops an infrastructure, it WILL compete - "free trade" or otherwise. That did NOT originate with NAFTA, and that historic tide was never turned back with even our most protectionist historical measures.

You are batting at leaves and branches which have always existed, while completely ignoring the roots.

What Walmart and other large corporate interests have in common is their superior capital - NOT self-funded capital, but rather proximity and superior access to superior credit and debt instruments - wealth that is literally siphoned from a collectivized money pool and loaned out to them, with interest, NONE of the interest of which comes back to that pool, with bad debt principle remaining in that pool, and with which NO Mom & Pop concern could ever hope to compete in the long run. Furthermore, an infinitely inflating money supply GUARANTEES that wage requirements will ALWAYS go up - regardless of what happens with other currencies. We were artificially PRICED out of our own markets, on ALL fronts, LONG BEFORE NAFTA.