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Commentary by Norm: Is Free Trade Good For Us? Pt. 3.

Continuing the thread about free trade

Auto workers in Japan and Germany have been paid more than UAW workers in this country have for more than three decades.  Your suspicions are flat out wrong.  The problem with the cost of building US cars is primarily, tho not exclusively, the cost of worker and retiree health care.  For every vehicle made in the US, GM paid $1400 in health care expenses.  For every car made in Canada, it paid just under $400 and only a little over $200 in Sweden, $300 in Germany.  Just one more of the countless tragedies wrought by our greed-centered sickness care system.
Another cost factor is the pay and benefit packages for US executives.  The ratio of average to CEO income in Japan is 20:1.  Throughout Europe, it averages about 30:1.  In the US it averages about 250:1.

You call it protectionism.  Nice use of GOP Newspeak.  That which you call protectionism is what created this country’s industrial powerhouse as Alexander Hamilton intended when he outlined it 200+ years ago.

But how do you come to that conclusion that I am criticizing what I want?  Did you miss my comment about reciprocity?  If there is to be free trade, where is it in Japan, Korea and China?  I don’t care how they run their trade policies.  But I say that ours ought to be a mirror image in dealing with them.  The problem is that the policies are misaligned.  The problem is that American industrialists are short-sighted fools who see no further than the current quarter’s bottom line as they strive to cut costs without caring about the vitality and strength of market demand.  Ours look three month down the road (three years at most) while theirs look three decades down the roads.  As a result we have a suicidal trade policy while our trading partners have a self-defensive one.  We have two guns aimed at our head.  Guess who loses.  Almost everyone in this country.

The race to the bottom does not produce and never has produced a vibrant domestic economy.  No country in human history has ever succeeded that way.  Many have succeeded by shielding domestic industries as the US, Britain, Canada, Germany, France, Japan, etc. have done.  Some have succeeded by becoming predatory exporters because other countries let them as Japan, S Korea, China, etc. have also done.  Some have done so while sharing the rewards with the line workers.  Most have not.  And the current economic orthodoxy works hard to prevent those rewards from being shared as they have not in the US.  Despite what our GDP indicates, the US economy is far weaker today than it was in 1965. (There is a standing joke among those economists who understand the stupidity of our National Income accounting; it starts with a question.  “Who is the most productive person in America?  The person on the way home from the hospital after getting his/her chemo therapy who gets a call telling him/her that the house is on fire and has a car accident hurrying to get home.”  All those casualties are people, too.

As for international trade meaning union rights, on what planet and in which century?  Just talking about 1994 and NAFTA, most if not all, of the few independent Mexican unions opposed NAFTA then and do so now.  In most countries in Latin America, the labor movement is either rigidly controlled by ruling elites as in company unions while attempts at organizing independent unions get you murdered, as in Mexico, El Salvador, Guatemala, Honduras, Argentina, Chile, etc. at most times no matter who sits in the palace.  Chinese unions are controlled by the govt.  Korean unions have only recently been allowed to operate somewhat independently.  They are powerless in Bangladesh, Vietnam, etc.  While corporations have free rein to roam the earth, unions are rarely allowed to operate across borders.  Pushing trade deals has not led to ANY strengthening of union rights anywhere.  It has far more often  weakened them.  And all of those working people are people, too.

Somebody gets hurt?  Everybody gets hurt by asymmetrical trade policies.  As Japan has been discovering for 20 years.  As America has been experiencing for 40 years.  As Mexico as been experiencing for 20 years.  And trade agreements with no means of allowing a retaliatory response and no teeth to force adherence to the intent and wording of the agreement is a circular firing squad for American working people and the economy.  Free trade is a fraud because it does not exist anywhere except here.  I’d be generally in favor of it if it were practiced among our trading partners.  But it isn’t.  And none of our trade deals has caused them to practice it.

Our subsidized industrialized food industries have destroyed countless countries’ food independence as well as displacing millions of itinerant farmers who were self-sustaining and now are wards of the state or garbage pickers.  All are people.

Prices that do reflect all the costs of producing, distributing, consuming and disposing of any product from food to electricity to cars to airplanes means they are being subsidized in one way or another.  In America price is a really terrible way of determining the cost and efficiency of producing anything.  All those folks who pay the uncaptured costs are real people, too.


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