So it's come to this. America's record-breaking trade deficit -- continuing to balloon thanks to corporate-written "free" trade policies -- is creating such a massive imbalance that the Financial Times reports that our port infrastructure is at "risk [of] being overwhelmed by surging imports from Asia." Apparently, "the US need[s] to add capacity equal to the Port of New York and New Jersey every year to cope with a projected doubling in import volume by 2025."
This, of course, assumes that the "free" trade policies that are causing this imbalance will never be changed. And if you look at the right-wing consensus in Washington on this issue, that really might be the case. Here you have the conservative Cato Institute arguing with a straight face that this job-killing, America-weakening trade deficit is "A symbol of economic strength." And then there's the supposedly "moderate" Democratic Leadership Council trying for years to justify the trade deficit its corporate-backed "free" trade policies created by telling us to just relax and "put it in perspective." Could the bipartisan complicity in selling out America be any more clear?
Thankfully, Businessweek (not exactly a "liberal" publication) does "put it in perspective" -- and it's not pretty. We are piling up a trade deficit "at a rate of $2.2 billion a day, or $92 million an hour or $250,000 a second." Why worry about this? Here's why:
"The disaster scenario is a crisis of confidence among global investors that triggers massive selling of the dollar. The greenback would tumble. The Federal Reserve would have to jack up interest rates to stem the dollar's losses. That would cause the economy to slow drastically, drying up demand for imports. Inflation would rise because imports would become more expensive."
This, of course, says nothing of the well-documented and destructive impact the trade deficit is already having on jobs and wages. Yet in the face of all this, only a few courageous political leaders have demanded a wholesale reevaluation of our corporate-written trade policies that have caused this imbalance. And almost no one other than the labor movement has reminded the public that America could be exercising its very clear rights at the WTO that would allow us to deal with this trade deficit. As labor expert Roger Tauss notes, the U.S. can:
"Exercise our rights under Article 12 of the W.T.O. and impose a temporary, across-the-board tariff increase to reduce America’s trade deficit. Contrary to popular belief, W.T.O. rules allow tariff increases, but only for the purpose of closing a persistent trade deficit. We can’t raise tariffs to gain a trade surplus, but we can do so to close a deficit."
Tarrifs, of course, are a taboo subject. And while they aren't ideal, you'll hear all sorts of alarmist, dishonest right-wing propaganda from both parties attacking them as some sort of doomsday scenario (which they don't have to be if done right), and trying to make us forget that America's own economy (like other major industrialized economies) became the powerhouse that it did under a system of targeted tariffs. Meanwhile, the Bush administration are joining hands with congressional Republicans and Democrats to negotiate more and more "free" trade pacts with more and more repressive low-wage regimes like Malaysia and Communist Vietnam -- trade pacts that, thanks to corporate America's campaign cash, will be free of any labor/wage/human rights/environmental protections meaning they will increase our destructive trade deficit even more.
But make no mistake about it -- if politicians continue to allow Big Money interests to write our trade policies and permit our trade deficit to keep increasing, we're in for something far worse than targeted tariffs: we're in for a Depression, or worse.