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Rejecting the religion that is free trade

September 09, 2019

Editors note: CPA member Roger Simmermaker explains how free traders wrongly focus on efficiency and low prices instead of production and employment.

Exclusive: Roger Simmermaker warns of cost of 'efficiency uber alles'

[Roger Simmermaker | September 8, 2019| WND]

It is no secret that free traders worship free trade as a religion. Syndicated columnist and former presidential candidate Pat Buchanan once said free traders worshiped at the “altar of efficiency” since they advocate lower prices as an end game and ultimate goal. However, if lower prices are the end game and ultimate goal for our economy, then why not lay off all the American salmon producers and get our salmon exclusively from overseas for lower prices? That would obliterate salmon fishing in California, which is an industry worth $1.4 billion and accounts for 23,000 American jobs, according to market-research firm Southwick Associates.

Free traders believe there is no unacceptable injury to working Americans when it comes to efficiency. To them, efficiency and textbook economic theory rules the day. But here is the price we pay to worship at the altar of efficiency uber alles:

  1. Destroy entire industries like the salmon industry
  2. Put Americans in unemployment lines
  3. Pay more taxes through unemployment insurance
  4. Pay more taxes to retrain the laid-off Americans (for newer jobs they never wanted in the first place)

While we are at it, why not also kill off the California avocado industry and import all our avocados from Mexico,? Where shall we draw the line in killing American jobs so that the rest of us who remain employed can buy less-expensive products?

Have free traders never considered what President Theodore Roosevelt said about free traders and their economic theories? During his 1904 presidential campaign, Theodore Roosevelt said:

 The question of what tariff is best for our people is primarily one of expediency, to be determined not on abstract academic grounds, but in the light of experience.

Notice that Teddy Roosevelt emphasized that the question was what tariff is bestand not if a tariff is best.

Teddy Roosevelt also noted that experience had not shown that we could afford...to follow those professional counselors who have confined themselves to study in the closet; for the actual working of the tariff has emphatically contradicted their theories.

One must wonder what free traders advocate in the latest potential job loss scenario of American tart dried cherries. The Wall Street Journal highlighted on July 19, 2019, that imports of tart dried cherries from Turkey have almost doubled over the last three years to 1.5 million pounds. Turkey can sell cherries at 89 cents per pound, while the U.S. can sell the same cherries for around $4.60 per pound.

And since soybean prices have dropped with the onset of the trade war with China, one would think that free traders, who are characteristically obsessed with wanting lower prices for all kinds of consumer goods (including food), would be celebrating and high-fiving each other. But not in this case. Ironically, free traders are now concerned with income losses for farmers and ranchers.

But why were free traders not concerned about the 3.4 million U.S. jobs lost between 2001 and 2017, which affected every congressional district in the country, as our trade deficit with China grew, as reported by the Economic Policy Institute (EPI) in October 2018? According to the U.S. Trade Representative website USTR.gov, Approximately 96 percent of U.S. merchandise imports are industrial (non-agricultural) goods. The United States currently has a trade-weighted average import tariff rate of 2.0 percent on industrial goods. One-half of all industrial goods entering the United States enter duty free.

Maybe free traders were listening to Jack Ma, executive chairman of Chinese-owned Alibaba Group, who complained in April 2018, This trade war will hurt millions of American small businesses and farmers. I feel for these men and women because I met many of them when I toured the U.S. last year to host our Gateway trade showcase in Detroit.

Notice that Mr. Ma had zero concern for the American steelworkers and aluminum workers, whom we know and can verify have been hurt and will continue to be hurt by cheap imports if we do nothing.

It is a defeatist free trade mindset that says that America simply cannot win on trade. To those with this defeatist mindset, there is no way for us to stop flooding our market with goods from workers in foreign countries who pay no taxes to America. There is no way for us to restrict trade, even though Congress is given the power in our Constitution to regulate trade with foreign nations. Other nations like China restrict trade with great success for their economies. That is precisely why China has a huge trade surplus with the U.S.

According to free traders, we should not protect American producers and manufacturers from cheap imports, because protection supposedly invites retaliation. And they see that as a scenario in which nobody wins. But if nobody wins, we still lose.

Many free traders remain devoted to American economist Milton Friedman (1912-2006), who was a leading favorite of those who favor free trade theories. In an April 27, 1978, lecture, speaking of trade with Japan at a time when Japanese goods were much cheaper than American goods, he said:

...the Japanese can produce whatever you name across the board from wheat and soybeans to television sets and automobiles more cheaply than we can. And let's see what would happen. We'd rush to buy them. The Japanese sellers would be paid for them in dollars. What would they do with the dollars? Nothing for them to buy in the United States because by assumption everything is cheaper in Japan. What then would they do with the dollars? If they would be willing to burn them up or to bury them in the Pacific Ocean, ah, that would be wonderful. After all, there is no product we can produce more cheaply than green pieces of paper.

Perish the thinking of free traders, and with it, the loss of hundreds of thousands of American jobs.

Read the original article here.


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