Why Trump Is Winning: The Hypocrisy -- And Disaster -- Of American Trade Policy

February 02, 2016


Factory workers in the old Soviet Union had a cynical joke: “We pretend to work. They [the bosses] pretend to pay us.” Similar logic applies in the world trading system. Washington pretends to write the rules; other nations pretend to obey them.

[Eamonn Fingleton| February, 1 2016 | Forbes]

For two generations already, increasingly pathetic American trade officials have turned a blind eye to the blatant barriers facing American exports in key foreign markets. The result has been a tragic roll-call of factory closures in the American heartland.

As today is the day of the Iowa caucuses, it is worth recalling that in Iowa alone – and Iowa is one of America’s less populous states – hundreds of thousands of jobs have been sacrificed on the altar of a doctrinaire free trade theory that overlooks the reality of how other nations run their economies.

Iowa’s employment numbers tell the story. In the 1940s, 31 percent of Iowa’s workforce was engaged in manufacturing. The ratio had declined to 20 percent by the early 1990s and as of last year languished below 10 percent. Hundreds of major factories have closed, many of them producing goods that in their day were considered America’s – and in many cases the world’s – best: Sheaffer pens, Maytag washing machines, Rubbermaid food containers…. Meanwhile the workers who once earned good money in these factories are now in far too many cases washed up among the long-term unemployed.

Read more at Forbes

Showing 1 reaction

Please check your e-mail for a link to activate your account.
  • Free trade is NOT free trade if your trading partner is practicing mercantilism, which is the opposite of free trade. The U.S. is practicing free trade by throwing our market wide open to cheap goods from China. China is practicing mercantilism, buying only what they can’t yet produce themselves.

    Our nation became the wealthiest, most powerful nation on earth, by practicing mercantilism. Alexander Hamilton convinced George Washington that, if we were to become independent, we must protect our industries with a wall of tariffs on anything that we could produce ourselves.

    Over the next 200 years, those tariffs were politicked away, allowing more and more cheap foreign goods to enter our markets, taking away our high-paying manufacturing jobs, and lowering our standard-of-living. The typical family saves $2,500 per year thanks to cheap imports, but it costs the typical family $15,000 in lost wages. Our middle class is being destroyed. That is, of course, one of the goals of the “progressive” left.

    The bulk of China’s growing wealth is NOT going to raise the standard-of-living of their poor. Most of it is going to build up the largest military in the world. We need to ask ourselves why China needs that much military power.