America used to have a policy of protecting our wages against unfair competition from low-wage countries. We placed a tariff on imported goods made by workers who were paid substandard wages. We protected our national interest.
The idea was to encourage the companies that made those goods to pay better wages. This way their countries' economies would improve and their workers would be able to buy the things that we make. Thus, the policy of protectionism was a way to improve living standards for workers everywhere, growing our own economy and improving our standard of living in the process.
The money collected from the tariffs was used for our common good: for example, it was spent on improving our country's infrastructure and education system (including science, research and development) so we could retain and improve our competitive position, as well as retraining workers whose industries were affected by changes in trade patterns.
Protectionism was generally our country's policy until a few decades ago. That was back when our country was OUR country -- for We, the People -- and our economy was OUR economy. And it worked. Our living standard continually improved. Then we changed to a "free trade" policy, meaning our workers work pretty much for "free" and big corporations are "free" to do anything they want. Additionally, without the revenue from tariffs, we have to tax our manufacturers more heavily, which makes them even less competitive internationally.
Since then average wages have stagnated and our pensions and health insurance have been disappearing, as have our savings. The country's trade debt has been increasing alarmingly. And corporate control over all of us has become near-total. Corporations are able to get their way by intimidating employees with the fear of losing our jobs to outsourcing, and intimidate governments by threatening to move to lower wage countries.
So it is time to bring back protectionism. It worked.
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Exactly the right length as well.
I'd argue ALSO in favor of "pollution tariffs" so that copper from China "costs" the same amount as copper smelted in America where pollution controls are required on every smelter, which may add 10-30% to the cost.
If we don't do this, then guess what, all those out-of-work copper miners aren't going to be buying ANYTHING built in the USA or China.
And this is true for virtually EVERY industry.
That sounds like a good start on actual protection, sane, reasoned, without invoking the Mob etc. Bad pennies turn up, though, Christine's out there, ear to the ground...
The best way to protect our country is to buy American. I don’t believe in protectionism; it will only make our economy worse. American goods have to have a higher value those foreign made goods. This is more than just the quality of the product, but where/how it is made, marketed, and sold. Right now, our country is in a "Wal-Mart node" If you see a value in maintaining American jobs; buy American.
Whose money is it?
Talk about wages.
Talk about tariffs.
Talk about obscene profits and salaries.
Talk about manufacturing/industry.
In the final analysis, simplistically speaking, its about who controls the money supply and how it is used.
Is it for us, or against us?
The way we increase the money supply is to issue more debt.
Each issue is more debt owed by the American taxpayers, generally two-to-three times the nominal issue amount.
And payable in US dollars.
The expansion of the economy by money supply growth is a tax on the American people.
The engine of economic activity in this country is the banking system, AKA, the financial services industry.
American banks engage in economic activity in our communities on the basis of the fractional reserve system.
The soundness of the system, and the basis of the trust in these transactions, is the actual dollar reserve portion(US savings) of the fraction.
Simplistically speaking, it is the dollar savings of Americans, including their businesses, that provide the foundation for almost all financial transactions in this country. That economic activity enables the accumulation of capital by international banks to finance much of the overseas economic activity that hurts Americans.
Simplistically speaking, we are funding our own economic death.
When our economy cannot support the growth in the money supply that supports this economic activity, we issue more debt that is purchased by foreign interests, often governments and international financial corporations.
The fact that they will be paid back in devalued dollars is of little comfort to we, the other people, because those are the devalued dollars we will be earning.
A sovereign country.
Economic nationalism.
We the people.
We, the other people.
As "Ike" Eisenhower warned us, "way back" in 1961, the military industrial complex has exerted its "untoward influence" until it has completely dominated our economy. Why build things here when you can import them, and you can just build missiles and expensive military hardware and sell them to the government and get rich? So it goes.
And what has happened, but-of-course, is that all that money turned out to be leprechaun gold. "Good morning."
We must not only rebuild our own national manufacturing infrastructure, under suitable protection while the seeds have a chance to germinate ... we must de-fang this military juggernaut that unfortunately can pay every one of our Congressmen and Senators approximately $160,000 per person per day in ...
... in "campaign contributions," I believe they are delicately called?
And honestly, Dave, I don't know if this country is quite yet ready to stop drinking the kool-aid. A gnawing, grasping Depression that bursts out of the confines of one country and savages the financial status of forty or fifty foolishly-interconnected countries might do it, and that's basically in-progress right now.
Our own human nature turns against us in these times. Only when quintillions of leprechaun-dollars evaporate in the morning's light may we ever again grasp that those gold coins never existed in the first place.
Welcome to the "Union Of Workingclass Liberals of America", dude!
Sure took you long enough to figure it out...
heh heh
Economic blogs don’t stay in frame very long on HuffPo. Most people find them boring or too complicated I guess. Too bad, because there is really nothing that is more likely to affect the lives and prospects of Americans than economic policy. Many, people on the street, intuitively understand that they are getting screwed, but lack specific knowledge and the confidence in that conviction to act and vote appropriately in their own interest. So economics is likely to remain the purview of paid corporatist apologists. But put more simply, the U.S. has fully developed into a fascist state, relying on propaganda to drive public and government opinion in favor of policy that benefits corporate interests.
Maybe it is time to realize that corporate control of our government is sedition. Because if the wealthy continue to successfully promote specious economic policy that damages the nation’s economic power and therefore international power and influence, they will eventually destroy the country.
Really? It's a conspiracy dammit! Look at this FAKE website. It fooled me once but never again thanks to your astute observation: http://nobelprize.org/nobel_prizes/economics/ and here: http://nobelprize.org/nobel_prizes/economics/laureates/
And that Russell Crowe movie, "A Beautiful Mind", based on the life of the so-called 1994 Nobel prize winner in economics, the Nobel Laureate in Economics, John F. Nash Jr., must have been a complete hoax too. These economists will stop at nothing I tell you. Devil spawn.
I have been bitchin' for the last two months about the Biz section of HuffPo...for one, WHY the Hell is there such a L-A-G between the time one posts here, and NONE when one posts on the Politics section?
This is the ONE section where HuffPo should give us our head and let us run WILD!
Idealy, the tax burden should be wholly lifted off of exports, the product of American workers, and placed on imports, the product of foreign workers. This is the way Washington and Hamilton intended it. This is the way America became the most self-sufficient republic in history. This is the way to ensure American sovereignty and self-sufficiency forever.
-Patrick J. Buchanan, Day of Reckoning
Globalization is a cover for American imperialism. The neoliberal policies of post war America paved the way for the neoconservative policies of George W> Bush. Free trade is hollowing out the U.S. industry, destroying the dollar, and plunging the country into permanent dependency and unpayable debt. One of every six U.S. manufacturing jobs has disappeared under Bush.
Alan Greenspan in 2005 warned about the growing gap between rich and poor. Three decades of experience show that the free market will not solve our problems. Many hundreds of billions of tax dollars have been diverted to the rich, leaving our parks, schools, and local government services starved for funds. Jobs and assets are going offshore, sometimes to the detriment of not just the economy, but also national security.
Allowing the megacorporations to exercise their free speak by buying politicians and elections and media. Multinational corporations make quarterly profits for themselves.
It is called Neoliberal Economics.
We are subject to an organization, court and banking cartel that have more sovereignty than our own United States!
The only reason the allies won WWII was because of the industrial capacity of the USA. Now who has the industrial capacity? China.
The founders of this nation believed in the Constitution and TARIFFS. The American people have been sold a bill of goods by corporatists. They don't confuse America's interests with their own because they are not the same.
There is some inherent flaw in the Elite Human Character which gravitates to Feudalism and away from Democracy. FDR made mention in the early 1930s, that there was a segment of the Corporate Community and the American Elite who felt that Democracy had run its course from their perspective and were actually making note of the rise of Fascism in Europe as a future template for America. The wealthy have a problem with a world in which they have to share power.
I mention this because I think there has been a conscious effort to disempower the American People by shifting the mechanism of Economy, along with millions of jobs, abroad. I really see this whole Friedman Revolution as a power grab.
The only way to correct this problem is revisit the actions of FDR and resurrect the notion of a mixed Keynesian Economy for the United States. That would be the path to a reinvigorated Middle Class, Millions of Jobs for Americans working on the Programs that will be necessary to rebuild our Nations infrastructure and the most likely way to institute Socialized Medicine in our Country.
I agree with your opinion on Protectionism, which would require the United States to withdraw from the WTO, but I feel it would need to accompany a foundational change in American Economic Theory ...
Back to the Future.
I absolutely agree with you. The reason the US has massive trade deficits is because the US is an open country with low tariffs while the rest of the world intentionally has high tariffs and non-tariff barriers to US goods and services. And our political leaders are, quite frankly, traitors. They give benefits and privileges to foreigners at the expense of our people.
China and India don't abide by the WTO and they don't have an open system to US goods and services. Americans don't have the protection of foreign courts the way foreigners have equal protection under the law here.
In the rest of the world, Americans can't own property in foreign countries, yet any foreigner can own property and all their corporate assets in the US.
The fact is even if the US raised tariffs on foreign goods and services, foreigners would still continue to come here because it is the richest market in the world.
Our industrial sector has been gutted because of free trade and we have every right to protect our industrial sector from competition just like every other country in the world.
The first item is of course health care. In every other manufacturing economy the government pays for heatlh care. To make all our jobs competitive we must go to single payer. We all know the figures, health costs are 14% of GDP and we still have 50 million uninsured whereas other nations spend half as much, cover all their citizens and have equal or better outcomes.
The second item is tariffs. The emerging economies specifically in Asia practice unfair trade practices by manipulating their currencies and dumping product. China subsidizes energy costs as well. Then there is the environmental damage by overseas operators that our producers have to mitigate. Side agreements just won't work, they are unenforceble by in large. Tariffs are the only real leveler that can be implemented and can be used to help pay for single payer health care. Our current trade deficit is unsustainable and many of these products can and should be made right here to create jobs, reduce world pollution and energy usage. Tariffs will also force more foreign companies to manufacture here, again creating more jobs.
America must retain and develop more manufacturing capability if only to serve our own market. Should the current trends continue we will have nothing to trade to the world. Remember those food, tech and service sector trade surpluses, that's right, they are all trade deficits now.
Smoot-Hawley made things worse, not better. There was 'globalism' for all practical purposes even during the New Deal, which continued protectionism. And the blowback meant 34 countries who'd not played the protectionist game suddenly were in a tariff war against the U.S.
Autmobile export dropped 90% to some markets, never to be recovered.
Protectionism continues now in the guise of corporate cronyism.
Oh, can anyone recommend a U.S. made LCD TV?
With our trading competitors manipulating their currencies and dumping product we will bleed to death.
We need tariffs and we need them NOW!
The market had already crashed and the depression well under way when this was passed.
Speculative bubbles, irrational exhuberence, negative savings, deficits caused the depression (sund very similar to todays situation)
You may be able to make a weak as it would be case that during times of trade surplus tariffs could be harmful, but during times of huge deficits tariffs may be the only way to balance the equation and put US mfg back on its feet.
Free trade was never supposed to be about labor arbitrages and the removal of capital and infrastructure from our own country but that is exactly what it has become.
Tariffs could be used to pay down the deficits making us less behgolden to foreign govt influence, bolster the social safety nets, and pay for increased inspection of unsafe imported goods
It's the only simple, fair, and tranaparant way I've heard of to deal with all the concerns we have.
The classic downside is that increased wages are inflationary. Some displacements will result before wages and prices reach equilibrium, but all economic models say that reach equilibrium they will.
On the question of the self sufficiency of a nation in time of war, the case is so screamingly obvious that I am astonished that it is not a priority issue with the Pentagon.
I am an engineer. I know that industry does not spring full grown from a corn field. It takes generations to build and refine manufacturing techniques and research and development traditions. At present we have all but killed the feed of young people into systems, manufacturing and engineering concerns, that produce advanced technical skill.
And the most bald faced lie ever served up to the American people is that technology will be our salvation in a global economy. That somehow magic will make us the world’s only resource for ‘thought’. It can’t happen in a country that makes nothing, because thought does not spring full grown from a corn field either.
The question is not whether protectionism is a good idea or not, the question is how can the nation expect to survive without it.
Increases in wages come from increases in productivity. Currently all wage increases are going to the top few. In fact average wages are decreasing a bit and have been for some time. Any gains that are seen from these trade deals seem to actually be hurting the average citizen because it consolodates corporate control. Note that when there were rapid increases in average wages there were not these huge paychecks at the top. So increases in wages would be more of a distributionary factor, not inflationary.
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On your other point, yes, we are wiping out our manufacturing infrastructure. it is going to be very difficult to recover that.
OMG, this is an absurd statement. Consider the extreme case. A new president orders an across the board wage increase of 50% in the US. Everyone suddenly has all this extra money to spend. You're telling me that there will be no inflationary pressure? An extra 100,000 people want to go to Hawaii for the summer and hotels won't raise their rates?
Growth of the money supply is one source of inflation pressure. So is higher wages. So is very low unemployment rates. So is higher oil prices. So is a decline in the value of the dollar. So is a tax decrease. Etc etc.
I see that the people blogging on here have reduced a complex world into a simple place occupied by good guys (us) and bad guys (corporations), with a conspiracy around every corner.