Free Trade vs. Government Trade

LetsMake3Back in my misspent youth one of the most popular afternoon television shows was “Let’s Make a Deal” in which audience members would try to pick the right box or curtain that might just have a prize behind it. And if they made it to the big deal of the day, of course they had the choice of three doors behind which might be anything. Sometimes the box, curtain or door was hiding a booby prize.

 

Today’s news headlines have been rife with material on the TPP or Trans Pacific Partnership, which will, supposedly, open up more markets for American goods and trading opportunities in various countries around the Pacific Rim. But these sorts of deals, or partnerships or organizations have a bad track record. In fact, whenever government gets into the “free trade” business, there generally appear to be more problems than benefits, at least for Mr. and Ms. America, or their historic predecessors.

 

When we look back at the American Revolution many people tend to forget the commercial aspects of that event. For example, regulations required the American colonies to supply raw materials to British factories, and then buy the manufactured goods, all to the profit of the “mother country.” The colonies, to their detriment were barred from creating industries that could process the raw materials right where they were produced.

 

Nations have always had an interest in protectionism and when possible, increasing national income at the likely expense of others. The infamous Smoot-Hawley Tariff Act of 1930 was expected to benefit American businesses by reducing imports. Whether or not this contributed to the Great Depression is still debated, but it certainly did nothing to help foreign businesses, and it also resulted in retaliatory tariffs from other nations on imported US goods. Thus, US exports suffered.

 

Then there was Franklin Roosevelt’s “alphabet soup” of agencies, some of which were designed to use the guise of public safety or health to restrain trade and put small companies out of business. That was precisely what precipitated the infamous Schechter Poultry case.

 

But wait, you say. This isn’t about tariffs, but about free trade. Everyone knows that free trade is a good thing. The reasoned response is that generally speaking, it is. But the question that must be asked is whether or not government involvement in negotiations of this sort really result in “free trade” and if not, who benefits?

 

This presents a particular problem in the context of recent history. The North American Free Trade Agreement, depending on who you listen to has resulted in significant exports of American goods to Mexico, however the AFL-CIO claims that it caused the loss of over seven hundred thousand American jobs, as businesses moved south of the border to hire cheaper labor. Free trade, as defined during the 1970’s, resulted in an incursion of Japanese goods, best exemplified by electronics and automobiles and the Japanese were accused of dumping, that is subsidizing production so that they could sell their products at less than the cost of production. Today’s supposedly free trade with China has resulted in massive amounts of Chinese made goods in American markets, that some believe portends the death of manufacturing in America. Meanwhile, American goods face a much more difficult road into Chinese markets.

 

But also to the point is the question of corporate cronyism that has become a significant issue of late. Whether is was the issue of Goldman Sachs getting favorable treatment in securities law violations, the federal loans granted to Solyndra just before it filed for bankruptcy and appear to have made their way into private bank accounts; or the “bailout” monies given to state and local entities which may have, in turn, donated portions of them to the Democrat National Committee, there has been suspicion in numerous quarters. Trusting any of government’s promises in the arena of trade seems perilous.

 

The question also surfaces over whether the USA may be ceding national sovereignty to the TPP organization by allowing its governing body, which does not guarantee to be America-friendly, authority over our trade practices, immigration, environmental regulations, labor rules and even, if some are to be believed, firearms ownership. In effect, there is suspicion that this would amount to an end run to circumvent constitutional authority and put another stake into the heart of the American economy. After all, the people who have benefitted most during the years of Obama management have been wealthy individuals and major businesses. The lower economic levels have suffered and the middle class has had severe impacts, driving some of its members downward.

 

Some of the negative results have been blamed on major industry groups, including the national Chamber of Commerce, which have lobbied in favor of amnesty for illegal aliens and perhaps even open borders in some extreme cases. All this because certain businesses desire lower labor costs and can back it up with significant financial benefits for legislators who do their bidding. Not what a government “by the people” is all about.

 

The question, therefore, is whether or not this TPP proposal will benefit the middle and lower classes in America, or is it primarily for the benefit of business lobbyists who don’t give a darn about the people. They can always move their facilities elsewhere and are no longer sufficiently linked to America to do anything more than take advantage of whatever political corruption they can obtain.

 

Further thickening the plot is the question of why the documents involved have not been made public and why legislators are not permitted to do anything other than view them in a room from whence they cannot take anything except their memories. If the deal is not fit for public consumption, then why is it under consideration at all? The “most transparent administration in history” is hiding something. What they are hiding is the source of much speculation, but one can be sure that it bodes no good for the American public.

 

During the last 6 years we have seen Barack Obama, not fundamentally transforming America, but working to fundamentally destroy America. The possibility that he may be doing more of the same here is a very tempting one; one that we should not take lightly. To trust in government in the best of times is folly. In the worst of times trusting government is insanity. The easiest way to promote “free trade” is to eliminate government involvement and let the businesses take care of it themselves. Thus, any government-negotiated deal becomes irrelevant and unnecessary. And since we don’t know what it is hiding, it is better not to get caught with a booby prize for the national economy. I’d be better off picking the box that Carol Merrill was showing on the display floor or whatever was hiding on Jay’s tray.

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