A Conversation With VP Biden on Trade

Senator Hollings, you nailed all the high notes with your commentary on the Huffington Post. Thanks for your insight and persistence. I wish voters could catch your drift and quit buying into this business about free-markets and free trade.

Since May, I've been working way too much (a blessing) to read your posts, but I'm catching up now.

I have to quote a few key sections of your post, so they appear on my blog...they need emphasis.

"After adopting a seal, the first bill to pass the Congress in its history on July 4, 1789, was a protectionist tariff. And we financed and built these United States into an industrial power with "protectionism." We didn't pass the income tax until 1913. In 1900 the colony was richer than the Mother Country by $25 billion and had a GDP double the GDP of Germany and Russia combined, causing Teddy Roosevelt to exclaim: 'Thank God I'm not a Free Trader.'"

"The Obama Administration says the solution for jobs is educate, educate. We in South Carolina need a lot more education, but we have enough to create jobs -- producing the "ultimate driving machine" for BMW and the most advanced aircraft, the "Dreamliner," for Boeing. It's Washington that needs education."

And yes, bring on the VAT to promote domestic industry and exports.

Now, they're blaming President Obama for being anti-business and for not paying down deficits. He should eliminate the corporate tax and replace it with a 2% VAT. This will make him pro-business; bring in more revenues to pay down deficits, and promote exports. The vote in the Senate against McCain's VAT was an increase in taxes. The corporate tax beginning at 39% averages at 27%. A 2% VAT cuts corporate taxes for production 25%. And please call it for a vote. Now! Don't worry about a filibuster. Any voting against a 2% VAT to replace the corporate tax will be voting against the major reason to off-shore jobs; be voting against jobs; against cutting taxes; against promoting exports, against paying down the deficit, and against business. 

All truth, as far as I can tell. Why can't truth ever get traction in the morass of our political and media environment?

Read the Article at HuffingtonPost

Free Traders: Friends or Foes?

I'm astonished that otherwise reputable economists continue to promote free trade dogma.

Free-trader enthusiasts consistently decry the horrors of tariffs, yet throughout U.S. industrialization (early 1800's to WWII), in fact, until Ronald Reagan's administration in 1980, we had broad protective tariffs on manufactured products as high as 48% and frequently averaging in the 30% range. And during this stretch of 150 years or so we saw consistent, profitable expansion of U.S. manufacturing, despite depressions, recessions, and a civil war intermittently impeding growth.

Since Reagan's income tax and tariff cuts, we've liquidated our industrial base for quick profits, dismantled the middle class and the unions that fostered it, eroded wages for wage-earners, and cemented in place an uber-wealthy, capitalized oligarchy. Our post-manufacturing banker class continues to sell out un-capitalized, wage-earners for a quick buck importing cheap junk from overseas and outsourcing design, manufacturing and service jobs. (John Jacob Astor would have been proud.) What's left? Retail, tourism (hawking Chinese t-shirts, hotel hospitality, rental desk clerks, etc.), health care, food service, and...wait for it...landscaping and gardening at the expansive homes of affluent bankers.

If free trade were such a godsend, would we not be seeing some real benefits, aside from cheap imported junk and profitable job outsourcing, by now? Benefits such as sustained and broad prosperity? Appealing employment opportunities? Health care for everyone? Education for everyone? Something besides cheap junk and a proliferation of rich bankers propped up by tax dollars?

Here's a revealing and contradictory take on free trade:
Thom Hartmann's review of Ha-Joon Chang's 'Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism'

Here's a Senator from South Carolina who recognizes the flaws in free trade: The Failures of Free Trade

The sooner wage-earning Americans wise up to the baloney we're being fed by our caviar-nipping, banking brethren, the better.

Here's a bit longer thing I wrote in response to comments on this and another post: Domestic Manufacturing vs. Free Trade

Here's a bracing rundown of NAFTA's caustic effects from Robert E. Scott at the Economic Policy Institute (www.epi.org): The high price of ‘free’ trade

Former Senator Fritz Hollings seems to concur:
We Are in Real Trouble
Politics Like Cancer

Here's a nice roundup of NY Times articles on NAFTA: http://topics.nytimes.com/top/reference/timestopics/subjects/n/north_american_free_trade_agreement/index.html

If you don't read all of the above, read this at least:
Free Trade Accord at Age 10: The Growing Pains Are Clear

And here's a nice little Wiki history of tariffs in the United States: http://en.wikipedia.org/wiki/Tariff_in_American_history
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