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Free Trade or Subsidized Trade

On Sun, Mar 6, 2011 at 9:50 AM, Chris Rickert <CRickert@madison.com> wrote:

Henry: I agree with your analysis to a point. That point is when you call for an end to free trade. I think it’s perfectly OK for the production of goods to move to where it’s cheapest. In fact, it’s inevitable.

I don’t. To accept it is to accept a race to the bottom, and I would add the “need” for governments to take a stronger role in subsidizing its citizens labor. I believe in economic sovereignty and independence. Maybe goods like exotic tea and other goods that fulfill ones desires the cheaper the better would hold true. But, when it comes to food, natural resources, and good we need for survival its really a national and economic security issue. Our nation’s founders relied on a system tariffs because they knew national and economic security are linked.

But I agree that in accepting free trade, its ill effects must be dealt with. Both parties have been all too willing to negotiate and do business with regimes that have major human rights issues (China is the biggest example, obviously) while not allowing for the kinds of redistribution of political power and wealth that would offset our country’s loss of jobs and increasing income gap.

What you are arguing for is a larger, and larger government in order to subsidize the wages that result from free trade.

Making it easier to unionize private-sector, new-economy jobs that cannot be shipped overseas (you can’t outsource cleaning a toilet, for example) would be a good start.

Well they can and they are. This is one area I part with liberals and progressives. In the final analysis there is no difference between outsourcing jobs for cheaper labor elsewhere, and insourcing cheap labor for jobs here.
There were good reasons FDR kept the earlier immigration controls in tact. Its the basic law of supply and demand. If a labor market is flooded with labor, there is only so much a union can do. In a tight labor market where unions are the gate keeper you have a rising tide, but a flooded labor market works in the inverse.
Henry Dubb
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