Free Trade has become an article of faith among Conservatives. Many on the right are blind to the disaster unfettered Free Trade has done to America. Wages have declined, Manufacturing discriminated and America’s living standards have declined. I was under the impression Conservatism was concerned about the economic well being of the nation.
So it’s stuns me that many Conservatives view this as Conservatism. The truth is Free Trade is Progressives. Just like Conservatives have adopted Wilsonian Democracy spreading as their foreign policy, they have adopted another Progressive ideology as Conservative. Free Trade was promoted by none other than, Woodrow Wilson himself.
With the North winning the Civil War, Republican dominance was assured over the Democrats. Republicans continued to dominate American politics until around the early 20th century. President William McKinley stated the United States’ stance under the Republican Party as thus:
“Under free trade the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man. [It is said] that protection is immoral…. Why, if protection builds up and elevates 63,000,000 [the U.S. population] of people, the influence of those 63,000,000 of people elevates the rest of the world. We cannot take a step in the pathway of progress without benefiting mankind everywhere. Well, they say, ‘Buy where you can buy the cheapest’…. Of course, that applies to labor as to everything else. Let me give you a maxim that is a thousand times better than that, and it is the protection maxim: ‘Buy where you can pay the easiest.’ And that spot of earth is where labor wins its highest rewards.”
Southern Democrats gradually rebuilt their party, and allied themselves with Northern Progressives. They had many differences but both were staunchly opposed to the great corporate trusts that had built up, and Republican corruption was endemic.[citation needed] This marriage of convenience to face a common enemy reinvigorated the Democratic Party, which catapulted back into power. Northern Progressives sought free trade to undermine the power base of Republicans – Woodrow Wilson would admit as much in a speech to Congress. A brief resurgence by Republicans in the 1920s was disastrous for them. Woodrow Wilson’s ideological understudy[citation needed], Franklin Roosevelt, would essentially blame the Great Depression upon the protectionist policies exemplified by the previous Republican President,Herbert Hoover.
That’s right, Free Trade is a Leftist concept. It is part of the Left’s goal to implement a global Socialist state. Free Trade destroys small companies and empowers huge Corporate entities. These entities in turn make alliances with governments to keep competitors out of business. Hence the result of Free Trade is Bigger Government, something Conservatism used to opposed until The Bush years. In fact, the last real Conservative President, Ronald Reagan was no free trader!
When President Reagan imposed a 100 percent tariff on selected Japanese electronics in 1987, he and the press gave the impression that this was an act of desperation. Pictured was a long-forbearing president whose patience was exhausted by the recalcitrant and conniving Japanese. After trying for years to elicit some fairness out of them, went the story, the usually good-natured president had finally had enough.
When newspapers and television networks announced the tariffs, the media reminded the public that such restraints were imposed by a staunch free trader. The less-than-subtle message was that if “Free Trader” Ronald Reagan thought the tariff necessary, then Japan surely deserved it. After more than seven years in office, Ronald Reagan is still widely regarded as a devoted free trader. A typical reference is that of Mark Shields, a Washington Post columnist, to Reagan’s “blind devotion to the doctrine of free trade.”
If President Reagan has a devotion to free trade, it surely must be blind, because he has been off the mark most of the time. Only short memories and a refusal to believe one’s own eyes would account for the view that President Reagan is a free trader. Calling oneself a free trader is not the same thing as being a free trader. Nor does a free- trade position mean that the president, but not Congress, should have the power to impose trade sanctions. Instead, a president deserves the title of free trader only if his efforts demonstrate an attempt to remove trade barriers at home and prevent the imposition of new ones.
By this standard, the Reagan administration has failed to promote free trade. Ronald Reagan by his actions has become the most protectionist president since Herbert Hoover, the heavyweight champion of protectionists.
That’s right, Ronald Reagan was not a fanatical fan of Free Trade. He knew it lowered the wages and living standards of Americans. Reagan also knew that it destroys small business, empowers big government and sets the ground work for a Global regime. It actually promoted the goals of Marxists, Communists and Progressives he opposed. This is not a Conservative position, they believes in National sovereignty and economic opportunities for its citizens.
One myth the Free Trade crowd promotes is that Smoot-Hawley worsened the Great Depression. Well that is a total and outright lie. This myth was started by FDR, who was no Conservative and a Progressive. He created this talking point to discredit people opposed to the Leftist Free Trade ideology. It’s ironic that Conservatives who hate FDR, are repeating one of his lies!
The debate over free trade is riddled with myth after myth. One that keeps resurfacing, no matter how many times it is discredited, is the idea that protectionism caused the Great Depression. One occasionally even hears that this same protectionism — specifically, the Smoot-Hawley tariff of 1930 — was responsible in significant part for World War Two! This is nonsense dreamed up for propaganda purposes by free traders, and it can easily be debunked.
Let’s start by reminding ourselves of a basic fact: The Depression’s cause was monetary. The Federal Reserve had allowed the money supply to balloon excessively during the late 1920s, causing it to pile up in the stock market as a bubble. The Fed then panicked, miscalculated, and let the money supply collapse by a third by 1933, depriving the economy of the liquidity it needed to breathe. Trade had nothing to do with it.
The Smoot-Hawley tariff was simply too small a policy change to have so large an effect as triggering a depression. For a start, it applied to only about one-third of America’s trade: about 1.3 percent of our GDP. One point three percent! America’s average tariff on goods subject to tariff went from 44.6 to 53.2 percent — not a very big jump at all. America’s tariffs were higher in almost every year from 1821 to 1914. Our tariffs went up in 1861, 1864, 1890, and 1922 without producing global depressions, and the great recessions of 1873 and 1893 spread worldwide without needing the help of any tariff increases.
World trade did indeed decline, but this was due to the Depression itself, not higher American tariffs. This is no surprise, as declines in the values of the currencies of America’s major trading partners wiped away much of the effect of the tariff anyway.
Why many Conservatives don’t realize the damage Free Trade and Globalization has done to America is amazing. It has reduced our wages, living standards and national sovereignty. Globalization empowers International institutions ate the expense of the Nation State. This is a Progressive ideology and not far removed from what Marxists and Communists want.
This shows the extent of which Progressive ideas have infiltrated modern Conservative. In fact, the Modern Conservative movement and the Republican Party are actually Center-Left and resemble the 1950′s/1960′s Democrats. Where they diverge from the New Democrats is in their attitude for America. But the truth is both the Republicans and Democrats are Leftists. The GOP is Center-Left and the Democrats Far Left.
This puts people like me on the Right in a conundrum. If we don’t support the Republicans, then Tranzi American hating Democrats take power. But the Republicans are Leftists as well, but at least they don’t hate America. In the current situation, those of us on the Right should back the GOP in 2012 to get ride of Obama. But afterwards, we should start a New true Rightwing Party that believes in Fiscal responsibility, National Sovereignty, Border Security, Strong Dollar, Tax/Regulatory reform and a Jacksonian Western Hemispheric Economic interest based foreign policy. However first we must defeat Obama, then we should break off from the GOP and go our own way afterwards.
Free Trade and Globalism is not Conservative, it’s Progressive. Protectionism is not the solution, instead we need to implement policies that benefit America as a nation and not prove some academic theories , Multinational Corporations who support Global Socialism or empowering global institutions. We need real Conservative solutions, not Progressive masquerading as Conservative.
Tags: Franklin Delano Roosevelt, Free Trade, Globalization, Woodrow Wilson
Free trade is responsible for the flood of American factories leaving for foreign countries and the returning surge of manufactured goods from completely foreign companies.
Exporting our manufacturing also exported thousands of trade secrets which were immediately copied by foreign companies and used against us.
With the Fair Tax, It could all come back to us, unleashing the biggest economic expansion this country has ever seen.
@ Prebanned:
.
Exactly! Free Trade is a done deal already. Protectionism isn’t the answer. Instead we need tax reform to create incentives to bring back good jobs here. We need to view others as rivals and do what’s best for us.
As you see, Free Trade isn’t Conservative.
The biggest industry in my hometown just closed up and moved to Juarez, Mexico. It’s really the only employer in town. 800 jobs lost. About 25 percent of the families out of work now. All so the product could have a made in Mexico stamp on it. We either have to raise the standard and health of living in Mexico or penalize these companiers.
Free trade only works well with the invisible hand of Adam Smith at work. This requires govt to set the foundational rules for the market place. Common goods are then dealt out equitably and market competition is equitable between small vendors.
We can coop out the work of someone like Coca Cola or Levi jeans to the rest of the world.
Rodan,
we cannot compete with slave work.
China is robbing us from everything we’ve worked for in the West in the last decades. It is really robbery. They copy the factories from Western companies in china 1:1 and plagiarize our products simultaneously. China has even the chuzpah to present the ripoffs of our products at our trade fairs.
@ Guggi:
Bump
Response to your comment on the OOT:
@ Bunk X:
That’s a straw man. If those other nations have the same policies as China, then they will be targetted to. If they are playing by the same rules, then American products would compete more favorable. The position you are taking that it’s OK for other nations to take makes no economic sense.
Why are other nations allowed to pursue their economic interests, but not us? There’s no free trade, what there is a Redistribution of wealth from America to China, India and others. This is Progressive not Conservative.
Read about teh roots of Free Trade and it’s goals. It’s not Conservative at all. So Trump’s 25% threat on China, is the Conservative position.
@ Rodan:
Not according to one of the great economists of our time, Dr. Thomas Sowell. In 2005 he discussed the results of the 1930s tariffs:
Full article here: http://www.jewishworldreview.com/cols/sowell061605.asp
@ Rodan:
That’s not a straw man, that’s a fact. And Trump is a populist. There’s very little conservative about him.
@ Bunk X:
Sorry facts don’t add up. SMoot Hawley was a boogie man used by FDR. Many Conservatives fell for it. Sowell doesn’t make a strong argument here at all. He is not using the stats of that time. There’s no facts backing up these claims.
I’m not a Protectionist, but I’m not a Free Trade with all type. The fact is, we are redistributing our wealth.
@ Rodan:
The way for us to compete, both globally and locally, involves deregulation, not tariffs. THAT is a conservative stance.
Hoover signed Smoot-Hawley into legislation, and it was a big mistake.
):
From the same article by Sowell linked above (that you didn’t read
Bunk X wrote:
Sorry, It’s a straw man Free Traders use. The facts don’t support Free Trade. Look at the results the last 11 years. Declining wages and anemic job growth. Sowell is looking at Free Trade theoretically, not reality. It can only work is the nations involved have the same economic standards.
As for Trump, He is a Conservative. He’s a Populist type Conservative as opposed to an Internationalist/Globalist type. His 25% Tariff call is to force China to let their currency gain real value. That way they play by the rules. Why let China keep manipulating us? Makes no economic sense.
Can you honestly claim that Mitt Romney, Mike Huckabee, Mitch Daniels and Tim Pawlenty are Conservatives? All these guys have done Progressive acts as governors. Yet they are being given a pass.
The Solution to this situation is Tax/Regulatory reform. We should encourage and reward companies that create jobs and invest in America. We should pursue policies That benefit America and view other nations as rivals.
@ Bunk X:
We are going to have to agree to disagree on this!
I’m glad at least we are having a debate on Economic policy. It’s better than arguing about whose’ having sex with whom!
@ Rodan:
Now THAT is a straw man, because we’re talking about Trump and tariffs, not other contenders for the nomination.
Here’s a concise answer from Sowell when asked directly:
You said,”The Solution to this situation is Tax/Regulatory reform. We should encourage and reward companies that create jobs and invest in America.” I completely agree.
@ Rodan:
I don’t think we disagree as much as you think, except that I don’t view Trump as a conservative. Hell, I actually considered voting for Perot!
@ Bunk X:
I did in 96!
As for Trump, I will give you the Populist label. But there is a Conservative style Populism Trump Is NOT a standard Conservative, but he clearly is on the Right.
But you brought up something very interesting.
What is a Conservative? I might do an open thread and have everyone put their ideas. No right or wrong answer.
@ Bunk X:
Let’s ged rid of Obama in 2012, then the Right can debate its future direction!
@ Rodan:
Interesting idea. The term means different things to different people and the definition also varies from country to country.
As for “Popular Conservatism” look at *ahem* California. “Anyone but Gray Davis!” was the mantra, and Ahhhnold won on a popular conservatism platform in the recall election. Look how well that turned out. I distrust populists. Screw charisma.
Bunk X wrote:
Bagua didn’t say that “China produces all exports with slave labor” but:
Oh, c’mmon this is ludicrous. China has an industrial workforce of about 90+ to 100 Million and then the number 10 Million doesn’t look so small, does it ?
I’m not a protectionist but free trade can only work between comparable economies at least in some degree. We (the West) don’t import much food from China so people won’t starve to death. Most products imported from China are from poor quality and you have to buy the same good more often. You don’t need 6 pairs of poorly made shoes if you can buy for the same money 2 or 3 pairs which are well produced and from good quality.
My point is that the West (U.S.A. and the EU) has to stop this and we should stick together. We are robbed by China and ripped off by her.
China has a lot of problems – aging working force, a fraud banking system, corruption, currency, real estate etc. – and we’ll see a big bang but we shouldn’t stand by and wait for it. We should be prepared and we should work to re-start our economies again. One way would be to use the taxes on Chinese imports to lower taxes.
Rodan wrote:
Couldn’t agree more.
Rodan wrote:
Sowell is correct but there is a huge difference to today: we should only taxe imports from countries with extreme lower standards for the workforce and other economical conditions we can’t compete with. We should NOT taxe every import, this would be protectionism and that is what Sowell was writing about and it didn’t work.
@ Guggi:
You’re rephrasing the question. It does indeed look small when you consider that China’s economy is only 25% industrial. However 75% is agricultural. The point was that slave labor consists of a very small fraction of China’s work force. You know what I meant.
Bunk X wrote:
Sorry ?
2011 January
GDP – composition by sector
agriculture: 9.6%
industry: 46.8%
@ Guggi:
…and that will only prolong our own recession due to higher costs of goods. The late economist Milton Friedman chimed in against tariffs:
Some manufacturers are moving out of China and into India due to rising Chinese wages, lack of skilled workers. The world is a changin’ under our feet.
@ Guggi:If you’re talking about work force:
Labour force
by occupation agriculture (39.5%), industry (27.2%), services (33.2%) (2008)
GDP was not what I was referring to.
@ Calo:
Happy Birfday+1, Calo!
@ Bunk X:
@ Bunk X:
Thanks Bunk
BBL
Free trade allows everyone involved to do what is most efficient and at the lowest price. It has economic advantages for both sides of a Free Trade Agreement. Alas the size of the US market is so large that it a world within itself and trade makes only a small part in its overall economy. That said the US has no real need to enter into free trade agreements with outside nations. Those agreements entered into are less that ideal as they come with so many caveats that they render the actual notion of free trade moot. China is skewing the terms of trade with the US by artificially manipulating its currency to maintain an unfair advantage.
There are plenty of small and medium sized nations, that by their very economic underpinnings must trade to survive mostly because their ‘home markets’ are too small to be viable. Hence the growth of trading blocks. A wrong reaction to the problem posed. Australia and New Zealand are cases in point. Australia and the US signed a Free Trade Agreement a decade ago but it was far from free. Australian tariffs were tiny and US protectionist policies forced the Aussies to swallow punitive terms of trade for years to get the agreement signed. Drugs beef and media are examples out of many. The US media can’t compete with the Aussies because over the years US media unions have indulged in featherbedding and have made the US industry uncompetitive. The Aussies were squeezed out of the marketplace by unfair rules. Same with drugs. The Aussies produce medical drugs for a quarter of the cost in the US because of US protectionist policies that shield US manufacturers from the cold winds of real competition. The Aussies again take a hammering as well as the US sick who pay through the nose for their medication and US drug firms make huge profits out of the suffering of their own people. The Aussies produce beef at prices a whole lot lower that US producers mostly because Aussie beef is grass fed and raised outdoors. Overheads are therefore lower. The US immediately placed a freeze on Aussie beef producers so that they couldn’t compete in the US until 2017. That was 22 years of US protectionism where US consumers paid through the nose for premium quality beef from Oz.
New Zealand produces milk more efficiently than anyone in the world. Fontara is the largest dairy company in the world and is based out of NZ. NZ by its very nature AHS to trade to survive as its population os just 4 million and it’s a long way away from everywhere. Yet the US consumer pays through the nose for its milk cheese and other dairy products. Ask yourself why? NZ has virtually NO tariffs or price controls on its exports. They saw the reality of a true free market 25 years ago and unilaterally took it upon themselves to act as an example to others. Ask yourselves why the US was the first into the Great Depression and more importantly the LAST OUT of it! It all came down to US protectionism, isolationism and wrong headedness.
OK so NZ can make milk more cheaply that the US because NZ has competitive advantages such as better organizational infrastructure, better climate (cows are grazed outdoors on grass) and a greatly better distribution system for dairy.. Get over it guys. Tell those folks in the North East to raise something else. NZ can’t make airplanes and cars so we import them. NZcan’t compete in steel production although it does have a $1 trillion reserve of ironsands. Instead of throwing up protectionist fences NZ makes small run highly ‘speced’ specialist stainless steels and other niche products because its size makes it nimble in changing very quickly to meet immediate market demand. That way NZ gets cheap steel through trade to fabricate whiteware that it sells internationally and also sells high value specialist stainless.
The US seems to have lost its mojo. Why not do what you do best . Innovate and invent. Buy in the cheapest raw materials from suppliers who have a competitive advantage over you where it exists add value and export and supply your home market at lower prices. Any US worker in peril of losing his job to overseas competitors is in the WRONG type of job. I agree 100% that china is screwing the scrum and poking the US in the eye. Free trade really means just that. FREE. The US is as guilty of manipulating trade whilst calling it ‘free’ for its own advantage as China. Get with the flow guys. TRUE free trade agreements help BOTH sides although often the larger party to the agreement has an advantage of market power. We can live with that . Just don’t be hypocritical and call China names when the US is equally guilty of playing protectionist games for local political reasons of featherbedding and pork barreling.
Here is the key, Fair Tax is not a tariff. It is country neutral.
Other countries are already doing it to us.
Stuff gets taxed when it is sold in the USA.
That means IMPORTS get taxed, EXPORTS do not get taxed.
We would not have to slap a tariff on any product made anywhere in the world, that is why I favor the Fair Tax.
No sense making other countries mad, lets just fix it.
Call it what you will. Tariff, Tax, Impost, Duty.
It’s called SEMANTICS mate!
It’s called protectionism
OK so if you don’t like the way someone screws folks during production of some product just SAY SO and make it impossible to import by regulation until the producers mend their ways.
Don’t try to manipulate the market with rhetoric and taking out of both sides of your mouth.
Call it for what it is and leave it there until you feel OK with the methods of production to allow trade to restart.
ENOUGH of the attempts to manipulate the market forces for social reasons.
Just ban something because the producers are scumbags and let it stop there.
Oh and by the bye, Have you noticed that the major boosters of so called ‘fair trade’ are socialists and progressives? Another good reason to stay away from this.
@ Aussie Infidel:
The goods and services tax would be called Fair Tax.
NZ also has income and corporate taxes.
The European Union has the VAT or value added tax that does the same thing.
If we did the fair tax it would only level the playing field.
If it is a tariff then everybody else is doing it, NZ has a 15% tariff on everything from everybody, including domestic production.
Of course the real benefit would be the abolition of the IRS, and defunding the corruption in our government by eliminating tax breaks.
@ Prebanned:
We are discussing terms of trade and trade protectionism here and not internal taxation. Please stay on thread mate.
Ideally NZ would pay a FLAT tax. Currently the GST is 15% whilst the average citizen pays around 20-24% income tax. There are no state taxes and no sales taxes per se.There is also no capital gains tax and the business tax is currently a flat 30% and due to come down to 28%.
Unlike the US almost ALL wage earners PAY TAX. There is far less of a gulf between the average Kiwi and the high rollers. Because of the size and population density most Kiwis can do things that most other first world citizens would have to earn a LOT more. Standard of living based on $$ may be lower that the US but overall quality of life is way higher.
Prebanned wrote:
NZ has virtually NO TARIFFS at all anymore. GST like US sales tax and State Taxes is a revenue gathering exercise. It’s user pays and allows NZ to tax tourists for the use of the infrastructure while they are on holiday. Because it is universal on ALL products it is not a tariff on imports. The user pays. Don’t use a service and you don’t pay.
@ Aussie Infidel:
Bunk, what Friedman doesn’t tell you is: mass.
Japan didn’t wipe out the TV production in the U.S. although the industry suffered a lot but China did. Only one niche producer is left.
Italy didn’t wipe out the soe industry but China does.
German didn:t wipe out the car industry but the U.S. producers did by themselves
Japan or Germany did provide jobs in the U.S/Europe. China doesn’t. On the contrary. Take e.g. what China does in Africa: China has leased huge areas of agriculture (with the help of corrupt clan chiefs and politicians) but doesn’t provide jobs there for the now landless African farmers instead they bring in their own Chinese workers. Same with the infrastructure they build in Africa: everything build with Chinese workers.
China does not only use slave workers but manipulates her currency. The exchange should be much higher and we can’t compete with this. Where ever you look China manipulates, steals intellectual property or uses your own economical weapons against you. They can do this because they are so many they have mass and no freedom.
This free trade is not a free trade because it is extremly manipulated from one side. China doesn’t go with the rules but we have to.
Btw: the number one export from the U.S. to China is “Electrical machinery and equipment” with a volume of about US$ 22 Billions. This is like digging your own grave because this equipment and machinery is designed to produce products which will wipe out again whole industries in the U.S. (and Europe). China is unapologetic to build a domestic market she is all and everything on exports. This is unhealthy.
@ Aussie Infidel:
Look here, NZ has a better tax system than the USA.
The GST is effectively a Tariff on imports while exports are exempt.
The USA does not need to apply any kind of specific Tariff on goods or services imported from China or any other country.
Enact the Fair Tax and the USA gains 23% on everybody.
NZ did it in 1986 with the GST and enjoys a 15% advantage.
@ Guggi:
Sorry this posting was directed to Bunk X #23
Aussie Infidel wrote:
GST is a blanket tariff on everything, it allows NZ a 15% trade advantage, exports vs imports, with everybody.
This is the best possible tax because it levels the playing field with the rest of the world who were charging NZ goods a VAT and allowing thier exports to be exempt from VAT.
Plus the GST is not picking winners and losers, it just puts NZ on the same level as Her competition.
The USA should do the same thing.
Calo wrote:
They will face huge problems because Indian employers have extreme problems to find skilled workers.
75% of engineers (85% of other students) with a degree are totally unskilled and not fit for any job. Indian employers are now looking for skilled workers in S-America and the Philippines.
@ Aussie Infidel:
I was with you until that post. Tariffs result in higher prices for the country that imposes them, and those higher prices get passed on.
It’s like the boycott mentality. You don’t like the producer of product X, and choose to penalize the producer by refusing to purchase the product from the distributor. The big guy doesn’t get hurt, the small local distributor does.
Bunk X wrote:
Bunk, for heavens sake ! It is of no interest how many farmers China has. China doesn’t and will not for a long time ruin the agriculture in the U.S. I don’t know why you build this straw man argument. We were never speaking about agriculture and slaves but about industrial work force and slave labor and I provided you the links. If about 10% of the industrial work force in a country are literally slaves and if nearly half of the GDP comes from the industrial production then no free country can compete with this.
@ Guggi:
Guggi, you keep reframing the question. 10M slaves in a population of 1.33 billion is an insignificant number. If you believe that the Chinese work force of 800M supplies the rest of the country with everything they need, you are wrong as the majority are off the grid.
Even if you’re talking about the documented work force, 10M/800M = 1.25% slaves, and that’s a small percentage, which was my point.
I don’t know what your purpose is for jumping into an otherwise light banter between Bagua and I on another thread, but go ahead and have the last word. I won’t play your game.
@ Bunk X:
Bunk, sorry but bullshit. Those 8 to 10 Million slaves don’t work as police man or teachers or farmers or physicians. They are not babies or elderly people. They are slaves and used as unpaid industrial workforce. Therefore it is of no interest how many people China has and how many of them are slaves or how many of the Chinese work as nurses as IT manager or in a call center.
Stick to the point: there are about 90 to 100 million industrial workers in China and 10% of them are literally slaves. No free country in the world can compete with such conditions in a free market.
Aussie Infidel wrote:
What a load crock. The basic tax rate in NZ is 19%. That means the average Kiwi, even a 7/11 employee pays 19%! This is far, far, far higher then state taxes paid in the US and not everybody pays Federal Taxes. The US does not have GST or VAT.
Where are you getting your figures for the average tax rate at 20%? I have personally witnessed employees refusing to work more hours because it would put them at higher progressive tax bracket and they would actually bring home less. Many employers are paying under the table.
NZ is a very, very expensive place to live and the US far, far cheaper. You will notice, Kiwis going to a food court eating but they won’t order drinks coz it’s so expensive. LOL!
There are no jobs except in the dairy industry and low end jobs like working in bars/restaurant. An average of 70 thousand Kiwis leave NZ every year to work in Canada, Australia and the UK and thats a conservative estimate. These same Kiwis come home when they’re able to buy a home. This made possible because NZ is part of the British commonwealth which means you can work in another commonwealth country. This is how NZ is surviving.
My experience at NZ is that it was very expensive and regulation nightmare. Your car has to go for inspection to be fit to be on the road. A simple rust on the hood and you will be denied the permit. This is in a country where sheep outnumber people! LOL!!!!!!
Sorry, if I had to choose between the US and NZ, it’s the US hands down.
@ Guggi:
That’s hilarious. Of course they do! That’s exactly what I said!
Meh. Go misinterpret someone else.
Rodan, I don’t agree that a tariff on Chinese made goods will solve Americas economic woes. What would happen when tariffs are slapped on Chinese goods? Now, Americans will try those products at home however, are you willing crazy prices for electronic goods and basic household items like shoes and a toaster? That is what is going to happen, things are suddenly going to be very, very expensive.
Why do you think healthcare in the US is so expensive? It is one of the few industries that are in house, no outsourcing.
Outsourcing helps to keep local industries competitive. Can you imagine how much you would be paying for Dodge or Ford without a Honda giving a run for it’s money?
The root cause of the problem is an overbearing government and a parasitic society. China has none of these problems but the US has. Get rid of the EPA and the Federal Reserve. Stop all the wars, close some bases, end all welfare eg. Planned Parenthood. Drill at home. All these expenditures are causing higher taxes and the devaluing of the US dollar.
Contrary to popular belief, outsourcing is not necessarily cheaper. The only thing cheap is labor. The cost of moving production overseas and then shipping it back is far, far higher then producing it locally. The cause of manufacturers moving overseas is that the business environment locally has become toxic.
Obviously you can never compete with China on labor but you can beat the pants off them on high end tech goods, innovation and R&D. Look at the Japanese. The Japanese knew their days of producing cheap goods was numbered when the S.Koreans and China started emerging. So they moved to high end tech which the Chinese could not compete with. Sony 30 years ago was considered a low end cheap good. Not anymore. Sony has reinvented itself and is not a high priced hight tech product. Honda produced Acurra and Toyota with it’s Lexus.
@ Aussie Infidel:
That’s the problem right there. Free Trade is good in concept and can work if the nations have the same type of economy. But if there’s a huge gap in economic development, it turns into redistribution of wealth.
@ Ben_Dover:
Totally disagree. Higher prices would not be bigger burden if people made higher wages. Outsourcing is redistribution of wealth. It takes from country A to Country B. Healthcare is expensive because insurers can’t compete across state lines and costs of litigation. Healthcare is the only field where wages are good at moist levels. Other industries have very limited good wage jobs and mostly low paying.
Lower wages mean less money that can be saved and used for investment or big purchases. The reason the current bout of inflation is devastating is because it comes as wages have declined.
Outsourcing destroys jobs and living standards. No way to spin that truth!
@ Ben_Dover:
I agree with you here 100% This is the key to reviving our economy.
Rodan wrote:
Higher wages? So how will you solve that? Are you willing to start a business and pay a ‘living wage’? It’s easy to talk but hard to do. It’s easy to condemn the business owner but hard to do it yourself.
Do you think that just because you slapped a tariff, business owners are going to relocate back to the US? The US is not their only customer and it’s too expensive to produce back home. Your ideas are no different from the liberal ideas of raising taxes, in the foolish notion of creating more revenues. Both ideas will fail.
Are you willing to pay 100 bucks for 10 dollar toaster? Or 200 bucks for 30 dollar pair of trainers? This is what is going to happen and life is suddenly going to become very,very expensive. This is compounded with a weakening dollar.
When you buy an outsourced good, that extra money saved is extra money in the economy.
I believe you should work with nature and not against it. There will always be some country with dirt poor labor, you can’t run away from it. What the US needs to do is ADAPT to changes but it’s not.
Study the economy of Singapore. 30 years ago, Singaporeans produced everything in house but the country has transformed itself from a 3rd world nation to a 1st world nation. Labor has become too expensive, so they adapted. The country adapted and changed it’s focus from manufacturing to shipping and investments. Today Singapore is Switzerland of Asia with a very high standard of living.
Adaptation is the key NOT control.
Money is an illusion of value. A representation of desire. Human desires in a free country are different than those in a country where Obama rules. The velocity of money would be higher i think in a free society with many small producers. It would be much lower in a society run on socialist values, barter, or oppression by the rulers. A country with a high velocity of money can have its markets corrupted by global actors like the EU or OPEC or the UN. We would strengthen ourselves now if we withdrew from Iraq and Afghanistan and Libya and saved the money and the lives and came back at them through trade and democratic values.
Rodan,
On the notion that healthcare is expensive because insurers can’t compete across state lines is pure nonsense. Insurance actually are the root cause of healthcare being expensive. Anything insurance touches will cause the cost the to skyrocket.
What the government should do is create an alternate cash based healthcare system. Healthcare should not be so expensive where you have to buy insurance for it.
The biggest problem I see in this entire thread is the number of people calling fair trade, free trade. Two different things. NAFTA et al? Fair trade.
Innerstate and innerprovince trade? That’s free trade. Free trade works just fine, the US and Canada were built on it. Fair trade though? That’s why jobs went poof, shipped off to mexico and so on.
@ Ben_Dover:
When all the jobs are outsourced and everyone is on benefits, we can all buy cheap foreign goods with the money from our latest home refinance until the communists come to reposses it because we can’t make the payments.
American made might cost more in the store but you save money by not having to support the jobless.
I am not talking tariffs I am talking about putting us on the same level as the competition, higher wages can be paid if productivity is higher.
The problem with the American economy today is the last fifty years of piss-poor political leadership (with the exception of RR) and the fuckwads that keep voting for it. Trying to put the blame on anyone except ourselves is a fool’s game. We have to fix the problems in DC Town first before anything else can be done. I’m not holding my breath…
Bunk X wrote:
What ???? Gulag detainees work as police men and teachers ? Any link for this ?
How can we compete with a wage rate of 6 cts. ?
Guggi wrote:
In that case DO NOT trade with China because it is a totalitarian regime run by thugs and scumbags. Do not try to play the market with complex rules that try to have a bit both ways. Either you have a philosophical problem with China or you don’t. If you don’t like their slave labour, financial and currency trickery and all the rest of their illegal regime then call them out on it and declare that they are not welcome traders in the US. Clear and simple and based on moral convictions. Trying to have it both ways and attempting unsuccessfully to manipulate Chinese behaviors with various taxes imposts and tariffs is hypocritical.
Prebanned wrote:
Bullshit!
GST does not allow NZ anything of the sort. It is a tax…. a CONSUMPTION TAX imposed on almost EVERYTHING sold in the country REGARDLESS of where it was manufactured. How can it be a tariff when it is equally imposed on BOTH imports and goods and services produced in NZ?
Bunk X wrote:
Please go back and read what you have written. It lacks logic.
As I said Goods and Services Tax GST is a CONSUMPTION TAX and is EQUALLY an impost on BOTH imported and domestically produced goods and services. Because of that it cannot be considered a tariff because if it was then it would only apply to imported goods and services. Come on mate admit it. IT’S A CONSUMPTION TAX. It also ensures that EVERYONE who uses goods and services gets taxed. No free riders allowed!
Ben_Dover wrote:
My estimate of between 20-24% tax takes into the consideration of the graduated tax scale. The fact is that the average Kiwi actually pays about 20-24% income tax overall. Frankly I can’t see why a FLAT tax of around 15% wouldn’t work if there was nothing to write off against tax. The only downside would be that thousands of tax lawyers and accountants would have to actually find productive jobs! Surely that can’t be bad?. There are NO state taxes in NZ because there are no states!
Kiwis pay income tax, GST and if they own property they pay council rates. That’s all!
As far as your story about Kiwis not buying drinks or chicken from malls. Must be in an alternate universe as it certainly not the one that Kiwis live in !
No jobs except in the dairy industry or in bars??? Now you are just being silly ! That sort of nonsense just means that you are running out of debating material and everyone knows it.
Next time you use your cell phone or GPS ask where all the timing crystals came from. Next time you want to know about agricultural aviation or silviculture or white ware production or speciality stainless steel, or Mars rover mechanical scoops and software, or carpets, or geothermal power production, or biotech advances or surface effect vehicle design, or tidal power technology, or radio network design, or conductive plastics technology or anti-cancer drug research or advanced hydrophone technology or some great tourism attractions, or world class mega-yacht design and building. You may just find a Kiwi involved!
Rodan wrote:
So why does the US try to screw Australia and NA with so called free trade agreements? All three countries are first world economies. All three a democratic nation states that observe the rule of law. The dynamics of the three economies is different as Australia and NZ are trading economies and the US is basically a home market with a marginal need for trade. But otherwise these economies should be able to trade and pick up efficiencies and reduce costs. So how come the Aussies and Kiwis are getting screwed by the US through protectionism and because local state pork barrel politics trumps US trade policy?
@ Aussie Infidel:
I agree with you!
Australia and NZ are very similar to America. SO Free Trade between the 3 should be a no brainier and is a win win for all. I have no clue why we are screwing over 2 traditional allies, but let a traditional rival like China screw us.
This si very weird indeed!
@ Ben_Dover:
That extra money then goes to but more outsourced goods. Plus with declining wages there’s less and less to spend. The US needs a well balanced economy. WE currently don’t have that. Free trade is the culprit and it’s not natural.
The truth is, we don’t have free trade. We have redistribution of wealth.
I wasn’t to thank everyone for the civility and bringing your A game to this thread. We are all good guys here and are just debating how to improve things.
Thank you all!
Very interestind read (I know it is from 2004 but the situation hasn’t changed much – today the ratio isn’t 1:5 but 1:3.6 but the volume has risen dramatically)
And now some sugar for Rodan
For a perspective on global economy and ‘outsourcing’ lets follow the product of an American company I used to work for.
In your computer, TV or any electronic or simple electric devices are parts built around powdered iron cores. The monitor you’re looking at has them, some probably pressed in Anaheim where I worked.
The powdered iron is shipped in from Germany AND China, processed and pressed in Anaheim.
The cores are then shipped for winding back to China or Malaysia and sometimes Europe. Winding is a labor intensive task difficult to automate in some apps.
The wound cores are then shipped, in many cases, back to the US, or Europe (mostly Germany that I know of) to be put into specific parts (i.e. motherboards, transformers,etc.)
Those individual components are then shipped to assembly points, again mostly Asian, for each specific product. Hence the made in China markings on so many products. From there they are shipped once again for distribution and sales.
The lessons to be learned are that;
1. shipping is a great business to be in
2. The economy is truly a global thing. That horse has left the barn
and isn’t coming back.
3. To stay competitive, and competition is the American way,
businesses must minimize their costs.
The tax and regulatory costs of American labor are stifling.
The reason for those costs lies solely with the government that profits from it.
A ‘protectionist’ stance means only more unworkable regulation.
They are ‘protecting’ the US right out of business.
@ Ben_Dover:
That’s a Bingo
Aussie Infidel wrote:
Because it does NOT apply to exports and thus benefits domestic producers at the expense of foreign producers.
It is a wash beause every other country in the world does the same thing except the land of the free and the home of the brave.
Aussie Infidel wrote:
That is the key that will unleash the productivity of free countries and deal a mighty blow to government corruption.
Aussie Infidel wrote:
Because our politicians are crackheads and need to be fired, we are working on that.
Poteen wrote:
All true, Fair Tax the system and most of our problems disappear.
We can fix China simply by improving our efficiency and taxing imports at the same rate as domestic goods.
@ Prebanned:
Taxes are a separate part of it. Government gets revenue at every level of business AND life. They already tax and spend every dollar made by Americans. And still they want more. ‘Tax Freedom Day’ is a myth.
Political mismanagement of American resource and resourcefulness makes business difficult and punitive regulation siphons away the bulk of any profits.
@ Guggi:
Marx Endorsed Free Trade!
@ Rodan:
Marx would love the American social system that exists today.
Prebanned wrote:
You mean to say that the US does NOT levy any taxes at all on US production that is bound for export? In NZ companies pay corporate tax at a flat 30% (reducing to 28% soon). Employees pay income tax on an overall average of 20-24%. There are no other taxes not even GST as that is a DOMESTIC TAX and exports are not domestically consumed. When these exports arrive in the US they are sold (ideally) as if they were US produced goods and services. Other than the Lend of the free and home of the brave, NZ doesn’t levy taxes … or tariffs. at the border. When those imported goods are sold in NZ they are treated the same as domestically produced goods and attract GST which as I said ad nauseum is a CONSUMPTION TAX.
Perhaps the US might fix their own problem by wiping all the duties, sales taxes and state taxes and just institute a CONSUMPTION TAX and then your guys would be not disadvantaged. NZ did this 30 years ago and it works just fine.
The ‘fix’ has to happen at your end mate.