Pat Buchanan: How Free Trade Destroys America and Promotes Globalism

[bobbyw24]

Ron Paul on these issues

Could you guys school me on NAFTA, and the free market view of global trade in general?

YouTube - Ron Paul on Free Trade - Lou Dobbs/CNN

 

[silverhandorder]

charrob all it comes down to is the cost of running a factory.

It cost more to do it here then in China. Ofcourse it is a combination of things. For example Chinese are more competitive because they have no regulations on their products or relatively few in comparison. They also provide heavy subsidies to their industries.

Yes we can raise tariffs on Chinese goods. However historically tariff wars hurt both countries participating.

On pollution and child labor I would rather someone explain this. The short version is that it is a combination of things. It is both their relatively primitive status as an economy and some encouragement from their own government.

 

[charrob]

Yes we can raise tariffs on Chinese goods. However historically tariff wars hurt both countries participating.

by not putting tariffs on Chinese goods, we have allowed the destruction of our manufacturing base. imo, this is one of the largest factors that have hurt our country. our jobs are gone!

unless someone can prove to me differently and explain their rationale, i have to agree with Pat Buchanan on this.

 

[Brian4Liberty]

I borrow from a friend who clarifies better than I:

Tell me, when shopping, do you choose the more expensive or the less expensive of two otherwise equal goods? Leave aside nationality for the moment; we can even assume that we're looking at the same US-made item, available in two different stores. A common enough occurrence, is it not? Well, which do you pick? Do you pick the more expensive or the less expensive one?

Most people are not comparison shoppers. They have favorite stores. They have favorite brands. People are lazy, they don't compare prices. They often think that more expensive automatically means higher quality. They follow trends. They buy for status. They borrow money to pay for things that they can't afford but want anyway. They charge on credit cards and don't even realize how much they spend. Ideally, every consumer would be like an advanced computer program that takes in every conceivable parameter and makes the most economic choice, but that is not reality.

Certainly the entire economy can shift to less expensive production over time, but end-consumers only play a part. Corporate executives play a larger role than consumers. In a sense they are consumers too, but a very different kind of consumer. They focus on cost and trends far more than an end-consumer does. They want to make a buck for themselves today. And yes, that means that they will often make very foolish choices based on cost. (see the recent thread on cheap fluoride from China). Literally, decisions are made that cost them more money (and quality), because they are so short-sighted and myopic. They may buy the more expensive products if it means a personal kick-back (of some type) to them. Of course that applies to big government as well as big corporations.

Over long periods of time and large numbers of people, economies will favor true lower cost, but it is not a smooth ride; there will be many bumps and reversals, and individuals and nations can be destroyed in the process.

I think free trade is a good think (and NAFTA is not free trade at all, anyone should opose it) but I agree with this. A flat tariff would be a proper way for the goverment to get some revenue. It is important that it is completely flat, because otherwise there would be problem of interests and corruption.

That's probably the best realistic choice. It would also free purely domestic businesses from the burden (and overhead) of taxes.

 

[silverhandorder]

by not putting tariffs on Chinese goods, we have allowed the destruction of our manufacturing base. imo, this is one of the largest factors that have hurt our country. our jobs are gone!

unless someone can prove to me differently and explain their rationale, i have to agree with Pat Buchanan on this.

First I don't have a problem with low tarifs.

Our jobs are gone not only because of tarifs but because of regulations and anti bussiness policies. When you say I want tariffs but don't want to touch the other two how can you claim to be a libertarian?

 

[__27__]

First I don't have a problem with low tarifs.

Our jobs are gone not only because of tarifs but because of regulations and anti bussiness policies. When you say I want tariffs but don't want to touch the other two how can you claim to be a libertarian?

When you say you want to rid the market of government force on domestic producers, but want to impose government force in the market on foreign producers, how can you claim to be for the free market?

 

[silverhandorder]

When you say you want to rid the market of government force on domestic producers, but want to impose government force in the market on foreign producers, how can you claim to be for the free market?

I'm not a purist. Regulations + hightariffs + anti bussiness policy is not where I want to be. I want to be at the low tariffs part.

 

[__27__]

I'm not a purist. Regulations + hightariffs + anti bussiness policy is not where I want to be. I want to be at the low tariffs part.

So you want to demand that American consumers pay more for their goods for some sort of good feeling in your head?

 

[charrob]

First I don't have a problem with low tarifs.

good!

Our jobs are gone not only because of tarifs but because of regulations and anti bussiness policies.

i agree, there are certainly things we can, and should, do to make it easier for domestic businesses to compete. one would be streamlining red-tape that might be involved with conservation and the environment so that it is easier for them: they shouldn't have to be going through mountains of paperwork to comply with environmental regulations, or safety regulations, etc.

-an anarchist would say there should be no regulations at all; i disagree. As a nation the big question should be: are we going to allow our nation to become a cesspool like China in order to compete with it? I say no!

When you say I want tariffs but don't want to touch the other two how can you claim to be a libertarian?

i'd need to know what you mean by not touching the other two? in a previous post i mentioned a manufacturer living close to my dad put in scrubbers in its smokestacks in order to comply with environmental regulations. -the results were fantastic- the air is much cleaner making it a safer place to live. How is that not better than having people get sick and filing lawsuits?

 

[charrob]

so you want to demand that american consumers pay more for their goods for some sort of good feeling in your head?

see previous post:

...

...

 

[Old Ducker]

by not putting tariffs on Chinese goods, we have allowed the destruction of our manufacturing base. imo, this is one of the largest factors that have hurt our country. our jobs are gone!

unless someone can prove to me differently and explain their rationale, i have to agree with Pat Buchanan on this.

In an advanced stateless society, trade (access to markets) would be regulated by retail, distribution and industry associations. Products not in conformance would be declared rogue and not allowed access to distribution in member outlets. While such organizations already exist, they don't have police powers due to the monopolization of coercion in governments. As long as we have a central government, the best way to protect industry, commerce and community as well as fund such government is a general tariff, in addition to excises. It must be a uniform and not targeted tariff however to discourage lobbying the attendant corruption.

I doubt Buchanan would agree with my reasoning, but I do agree with his in this matter and a cursory look at economic history confirms the correctness of his views. The US, Japan and Germany all became first rate industrial economies under a tariff regime. The current system fosters corporatism and undermines sovereignty (both individual and collective).

 

[silverhandorder]

So you want to demand that American consumers pay more for their goods for some sort of good feeling in your head?

Yes that and because I have easier time getting people to meet me half way.

i agree, there are certainly things we can, and should, do to make it easier for domestic businesses to compete. one would be streamlining red-tape that might be involved with conservation and the environment so that it is easier for them: they shouldn't have to be going through mountains of paperwork to comply with environmental regulations, or safety regulations, etc.

-an anarchist would say there should be no regulations at all; i disagree. As a nation the big question should be: are we going to allow our nation to become a cesspool like China in order to compete with it? I say no!

Actually you should read up on English Common Law it all but eliminated pollution without need for regulations. Regulations are used today to circumvent natural market forces that would punish those who pollute.

As I said before China is not an example of no regulations. China is an example of a country that encourages pollution. We do the same to a lesser extent.

i'd need to know what you mean by not touching the other two? in a previous post i mentioned a manufacturer living close to my dad put in scrubbers in its smokestacks in order to comply with environmental regulations. -the results were fantastic- the air is much cleaner making it a safer place to live. How is that not better than having people get sick and filing lawsuits?

Because in the market it works like this. First time someone proves it is detrimental to their health the polluters gets sued and has to pay reparations. Then the insurance companies consider pollution as a liability and from that point on all polluters either pay higher insurance costs and get sued for all they have or they change their business practices. It worked great for paper industry that used to pollute water ways.

You get the same effect without a costly bureaucracy. Another thing that EPA does today is that it frees polluters from reparation if it is found out in the future that their pollution is harmful.

 

[charrob]

Because in the market it works like this. First time someone proves it is detrimental to their health the polluters gets sued and has to pay reparations. Then the insurance companies consider pollution as a liability and from that point on all polluters either pay higher insurance costs and get sued for all they have or they change their business practices.

thank you: this is the first argument I've heard to reduce regulation through the market that makes sense. i don't like the argument because i think alot of people could still get hurt in our legal system. (my argument being that from personal experience what I've seen is that our legal system is very unfair and alot of good people get hurt). However, let that go for a bit to address the ramifications, if any, on whether this solution would mean we could do without tariffs on foreign imports.

all this would mean is that the domestic manufacturer would choose to invest in, say, scrubbers in smoke-stacks, eliminate mercury going into rivers, etc., all on their own. There's still one caveat: that means they are still paying money to do this that the chinese manufacturers are not doing. -that still creates an uneven playing field that makes it more difficult for domestic companies to compete. Add to that, that Americans are not going to accept child labor, slave labor, unsafe working conditions, and all the other stuff that goes on in chinese industry.

so, we still need tariffs to level the playing field.

 

[silverhandorder]

thank you: this is the first argument I've heard to reduce regulation through the market that makes sense. i don't like the argument because i think alot of people could still get hurt in our legal system. (my argument being that from personal experience what I've seen is that our legal system is very unfair and alot of good people get hurt). However, let that go for a bit to address the ramifications, if any, on whether this solution would mean we could do without tariffs on foreign imports.

One quick point I would like to make is that whether we like it or not the facts are that we traded a system with some problems for a system with the same problems plus more. So to me it's obvious that you should not try to fix something that is not broken in relative terms.

all this would mean is that the domestic manufacturer would choose to invest in, say, scrubbers in smoke-stacks, eliminate mercury going into rivers, etc., all on their own. There's still one caveat: that means they are still paying money to do this that the chinese manufacturers are not doing. -that still creates an uneven playing field that makes it more difficult for domestic companies to compete. Add to that, that Americans are not going to accept child labor, slave labor, unsafe working conditions, and all the other stuff that goes on in chinese industry.

so, we still need tariffs to level the playing field.

I agree free market tends to be a lot harsher then government. However you also have to realize Chinese have cons too. They give huge subsidies to their bussiness making it prone to competition outside of country. And if they decide to shower us with cheap goods that is great too we will shower them with other goods that they can not make. Right now we are not producing anything. With no regulations and low tarifs we would be producing a ton.

 

[mczerone]

by not putting tariffs on Chinese goods, we have allowed the destruction of our manufacturing base. imo, this is one of the largest factors that have hurt our country. our jobs are gone!

unless someone can prove to me differently and explain their rationale, i have to agree with Pat Buchanan on this.

By instituting more harmful regulations and focusing production in unsustainable areas, the govt put a disadvantage on American companies, and allowed Chinese companies to produce a more desired product at a cheaper price.

How this would excuse the govt adding artificial costs to products individuals buy from far away places is beyond me. Further, the logic that one location should be self-sufficient in industry overlooks the direct benefits of specialization and the division of labor: why should we (Americans) pay $.42 per ton (hypothetically) of iron ore when the Chinese can extract it from their local sources for $.30 and ship it here for $.10 (=$.40 to the consumer)? That's two cents that local iron producers SAVE if they don't dig, but buy from afar. And a tariff to add that two cents to the costs makes life more expensive for the local population, while giving profits TO THE GOVERNMENT, FOR DOING NOTHING BUT IMPOVERISHING US.

 

[LibertarianfromGermany]

There already is a fee for imports: It's called transportation costs.

If they subsidize their production in china and we get the low-cost imports, WE profit. Basically, the Chinese government is paying for a part of our product which is pretty good for us. This is EXACTLY why predatory pricing doesn't work and why subsidies are decreasing our living standards.

If we had a free market without tariffs, we could just say "You know what Chinese Government, thank you for giving us part of your money" publicly, the Chinese people would get pretty pissed since they're on the short end of the stick (paying for our consumption) and they'd do their best to put an end to the subsidies.

 

[tremendoustie]

so, you are saying the reason manufacturing has left the country is because the employees who worked in those factories are leaving their jobs for better-paying jobs in the government and the banking sector?

i guess we all see life in context of our own experiences, and in that regard, nothing could be further from the truth. i think you have a valid way of looking at things and i'm trying to understand your frame of reference, so bear with me.

at 18, i started work in a factory paying good wages, having good health benefits and a good pension plan. 7,000 people worked in that factory: just rows and rows of people soddering circuit boards. -after working there for 6 years i saved enough to go to college, which had always been my dream. -during a break i paced back and forth outside of my bosses office no less then 25 times trying to get the courage to go in there and tell him i was leaving: co-workers came up to me and said "you're crazy to leave a job like this with good benefits, good pay". i knew that i was but at the same time i had a dream. -so i left. -but let me tell you _nobody_ else left that factory. But years later the factory closed down and went to Asia: 7,000 people lost their jobs. They _loved_ their jobs.

Right -- but this is what should have happened: wages should have dropped, and cost of living should have dropped too. That would have made us competitive. Instead, because of regulations, wages were not allowed to drop, and because of inflation, cost of living kept going up.

Things balance out naturally. Do you understand what I said, how trade deficits cannot occur without borrowing or inflation? It's when government distorts the market that these problems occur.

so why did the factory go to Asia? -because Asia has slave labor, works their people 14 hour days for slave labor wages, employs young children, has unsafe working conditions in their factories, and spews all kinds of pollution into their air. And because of all of this, it's cheaper.

Yes, but in order for people in this country to buy from asia, they would need to have productive jobs in which they export to asia, or other countries. That is, unless there's lots of debt or inflation .. so again, the trade deficit could not occur without these things.

as Buchanan has stated in the past: the question is: do we want to allow ourselves to live in that kind of grotesque situation in order to compete? -to live in a polluted cesspool like China, to work in unsafe conditions? THIS is the question. My answer is "No"!

That's fine -- it just means we'll produce less. Imagine infinitely high tariffs. That means we consume what we produce, right? Now imagine a single person is allowed to trade outside of the country. He must give an equal amount to what he receives, right? So we're still consuming as much as we produce. There is no trade deficit. There is no theft of jobs. It just means that one person traded the fruit of his labor for something even better. It benefits everyone.

You're marking up to lack of tariffs what is really a problem with debt, inflation, and regulation. There will be full employment without these distortions -- because the cost of labor will fall until the labor pool is used up. And, the cost of living will fall as well, as production increases.

We'd have full employment, and we'd use the fruit of our labor, or what we could trade it for. Again, the problem is not the trade, it's malemployment, unemployment, and underemployment.

if a new manufacturer wanted to compete with the factory in China, they can't unless they resort to these sub-standard conditions. UNLESS: tariffs are put on circuit boards coming from China. That would allow 7,000 people to, again, have a _skilled_ job, good wages, and a good middle class lifestyle.

Not true. Again, see the example above. The total wealth of the country is the amount it produces, period. How many little green pieces of paper are used to represent this is irrelevant. The total consumption will be the total production divided by the number of people. It is up to each person whether they want less consumption and less work, or more of both. Whether the goods are traded or not is totally irrelevant.

If a job moves overseas, the people out of work will want new work. If the market is free (which it is not), wages are then allowed to fall to the point where all these people become employed. The cost of living falls with the wages.

so your argument would be: joe consumer now cannot afford to buy circuit boards. However, there's a new factory down the street opening up that makes the plastic casing for radios that have those circuit boards. This factory can open up because now, since tariffs are put on plastic casings coming from China, this factory can now compete. Joe consumer gets a job at that new factory, has better wages and, once again, a middle class lifestyle: so he can afford to buy those tariff'd circuit boards.

where am i wrong?

If wages are allowed to fall, there will be full employment anyway. And again, the amount of wealth is the amount of production.

The problem is, wages are not allowed to fall. There are a great deal of fixed costs to employing a person, including huge amounts of red tape to wade through. Factory owners should be able to hire a person on the spot for whatever wage they'll take.

At best, tariffs are a band-aid to fix the problems of not having a free economy. Full and effective employment is what is needed. That's it. It may be tariffs help us avoid the full brunt of the negative impact of market regulations and distortions, but they are not necessary to achieve full, effective employment, in a free economy. In fact, they distort the market so that people may be employed in areas with high tariffs, when they'd be better off working in another sector.

 

[therepublic]

• Contaminated drywall from China that is making residents sick is a serious problem in Florida. http://www.cbsnews.com/stories/2009/03/26/cbsnews_investigates/main4895737.shtml

• Drywall has been found in prescription drugs from China
• Inferior Steel from China is compromising the safety of schools, bridges and public buildings.

• food from China contaminated. http://www.nytimes.com/2008/10/31/world/asia/31iht-01china-update.17426856.html

• Toys from China found containing lead, and now cadmium.

Cheap does not equate better. My Congressman says the government is afraid to stand up for us in this instance because China holds a large hammer...our debt...we do not want to anger them.

You see, if they co-operate with our so called government regulated "free trade" deals, we give them money and technology. If they don't agree to co-operate, we bomb them, and move in with the pretense of showing them Democracy. China was smart enough to turn the game around in their favor making fools out of the elitists who envision a one world order in their control. The jailer becomes the prisoner at our expense.

Note: Japan is one of few trade partners who tries to play the game fairly by putting factories in the U.S.. They are given the third degree over a problem with their cars, but China is handled with kit gloves. hmmm...keep track of this story because I want to know where the troublesome parts were manufactured .

 

[therepublic]

Two more to above post:

• Faulty tiers from China caused crashes and deaths

• Hard dries from China found to have spy-ware installed

The list is endless

 

[Legend1104]

By instituting more harmful regulations and focusing production in unsustainable areas, the govt put a disadvantage on American companies, and allowed Chinese companies to produce a more desired product at a cheaper price.

How this would excuse the govt adding artificial costs to products individuals buy from far away places is beyond me. Further, the logic that one location should be self-sufficient in industry overlooks the direct benefits of specialization and the division of labor: why should we (Americans) pay $.42 per ton (hypothetically) of iron ore when the Chinese can extract it from their local sources for $.30 and ship it here for $.10 (=$.40 to the consumer)? That's two cents that local iron producers SAVE if they don't dig, but buy from afar. And a tariff to add that two cents to the costs makes life more expensive for the local population, while giving profits TO THE GOVERNMENT, FOR DOING NOTHING BUT IMPOVERISHING US.

Thank you. That is exactly right. I get so tired of hearing people say, "We need to stop our dependency on foreign oil." I understand the theory that if we are dependent on them and they are killing us, then we are funding terror, but that is based on too many faulty ideas. First, off you are right, specialization is very important. We need to get out of this walmart mentality that America should corner the market on everything. Look at the old South, cotton was king because they found something they were good at and did it. For anyone that is against war, specialization is the answer. Trade promotes freedom and peace. Read Mises and Rothbard on this. When we trade with people it makes a symbiotic relationship. They need us and we need them. Therefore, war is less likely to errupt. When we try to be self-sufficient we promote war because our policies are naturally hostile. True free trade will promote specialization, peace, and freedom. Look at Cuba and how we through our economic policies have done exactly the opposite of what we wanted. We wanted to end their dictatorship and communism with sanctions, but those policies are naturally hostile and have keep that regime in power.