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Trade deficits, tariffs and protectionism revisited

Unfair trade… the beating drum of avariciousness

(1st edition - Sept 2010) by A.O. Kime
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Arguments for and against protectionism have been taking place for over a thousand years… and while differences in opinion on the consequences still exist - self interests usually being the hidden reason - debates of an official nature now take place behind closed doors. As far as the politicians and media are concerned, foreign trade matters aren’t for public consumption anymore.

They have made it evident… public opinion doesn‘t count. Nor, apparently, does the loss of American jobs.

As a possible quick solution to American joblessness, raising duties on imports are not being discussed in public… not by Democrats, not by Republicans and certainly not by the television broadcasters ABC, CBS and NBC. There seems no other reason… all are beholden to big money (the primary beneficiaries of free trade). One might only find an occasional article on page 15 somewhere... but that obviously falls short.

Thank God for the Internet!!

While occasionally a congressman does protest, the event is rarely chronicled on any front page or covered on the nightly news. Plainly, the justification for our massive trade deficit is a taboo subject... except, that is, on the Internet.

Fair trade

Apparently, even 'fair trade' has been swept off the table... a concept having built up a head of steam a few decades ago although for naught, the clamor was ignored. Seemingly, it’s now just another ideal on life-support. Washington, as we're all aware, is a brutal shadowy place where ‘fair’ cannot compete with special interests - nor can jobs compete with what are deemed to be more important economic and political factors worldwide.

Whatever these ‘greater’ economic and political considerations may be, and the great mystery, and while they may make sense to the ‘me-too’ academics and thus to politicians, nonetheless the damage free trade has already done is clearly evident. Only a culture of egocentrics cannot see the current trade policies are emasculating America as a whole.

Little time is left to save the disappearing attributes of America… which includes the most industrious people ever assembled since time immemorial. Unknown to other societies and apparently to our own congressmen, bureaucrats and much of academia, this great assembly is exclusively due to a constitution created out of unselfish brilliance. However, unbridled trade will soon undo this great creation… make America just ‘average‘.

And, we all know, average in this world is a pitiful situation.

Tariffs

Tariffs (duties on imports) need not be raised across the board to create millions of American jobs however… only by finally enforcing ’fair’ trade would to be enough. Many countries around the world already embrace the idea of fair trade and are generally compliant so there is no need for them to be ‘punished’. While every advantage is surely sought and trade disputes will always arise, fairness is often found through negotiations… that is, with those willing.

China, on the other hand, isn’t negotiating in good faith. It is one of the biggest cheaters by continually manipulating the value of its currency for trade advantages. While China’s recent announcement just prior to the G20 summit - held in Toronto in June, 2010 - that it would allow the Yuan to float like most other currencies in the world, it was short on details. Being short on details likely means “they’ll get around to it“.

However, China did throw us a bone. While the Yuan is no longer pegged to the U.S. dollar (once 6.83 Yuan per dollar), it is now merely a ‘managed float’ having risen only 0.7% percent in value.

In the meantime, as the US allows China to play games without repercussions millions of jobless Americans suffer. It’s time to finally levy and/or raise the duties placed on imports from China. As it stands, most imports from China are duty free. It is outrageous! China, after all, is a communist nation quick to ignore civil rights. By reversing policy, and in demonstrating a long-standing commitment to force China to play fair, will create millions of jobs in America ALMOST INSTANTLY.

If George W. Bush can ’un-sign’ America’s commitment to the International Criminal Court, then any President ought to be able to opt out of a trade agreement.

Consequences

On the other hand, failure to implement a strict policy of ‘fair trade’ will make 9-10% unemployment in America the new ’norm’. While the recent economic recession accelerated this unemployment rate, it would have been the situation in 5 years anyway had the meltdown not occurred (which erased 8.4 million jobs). Plainly, imports are killing the American dream.

So why hasn’t any administration since the 1980s acted to defend America? Well, apparently there are private American interests in China more important than jobless Americans (now 14.6 million). Seemingly at stake is the welfare of giant American companies located in China (or who outsource to China) who would no longer be able to reap the benefits of cheap-cheap labor (among other advantages). They might also lose access to the growing Chinese marketplace. Sacre Bleu!!

While China now has a financial grip on America, holding nearing one trillion dollars in U.S. securities, so too the IMF for being practically their only source of funds which is likely the reason the IMF isn’t openly critical of the undervalued Yuan… but if we don’t stand strong now China’s grip will only grow stronger.

So too, Taiwan and Nepal may be the reason for placating China… but why worry about their political fortunes if China isn‘t deemed a threat? After all, in 1980 the U.S. restored China’s status of 'most favored nation' in trade affairs which was made ‘permanent’ in 2000. It means there is little or no duty placed on Chinese imports… and while unconscionable, why forever? One should be highly suspicious why it was made permanent.

However, because of the political connotations of the term ’most favored’ it was renamed ‘permanent normal trade relations’ (NTR) in 1998. Nonetheless, a rose is a rose. It is incongruent to treat China like a great ally and worry about Taiwan and Nepal at the same time. If it isn’t absurd, then for whatever reason it comes at a cost of millions of American jobs.

Still, as one searches for additional answers, they'd be hard pressed to find anything that benefits America (as a nation) with the current policy. Certainly the stability in Southeast Asia isn’t worth it… if that‘s the excuse. America is too important to be put at risk. Perhaps the last sentence in Lincoln's Gettysburg Address best explains: "- that government of the people, by the people, for the people, shall not perish from the earth".

However, we must be wary of political excuses, invariably they're only a cover for greed. So, as derived from the process of elimination, lining the pockets of the mega-corporations is all that's left.

While success stories abound in America as well, particularly in agriculture and the airline industry, they don't negate the peril posed by the current policy.

What's more... if globalization is supposed to be about creating a peaceful 'world community', then so far it isn't working. Tensions and violence have increased due largely to unfairness across the board. Globalization has become more about 'domination'.

The mystery behind the massive Chinese imports further unraveled

There’s a lot of hype circulating about why free trade and globalization are good ideas… except it’s being generated by transnationalists (mega-corporations) who would benefit most. While on the surface ‘free trade’ sounds like a good idea except their idea of free trade is to ignore trade deficits. Further, their end game is about domination… which is driving the direction of globalization. They are defining its meaning.

In coordination with the media, the hype is also generated by ’think tanks’ with the same agenda. Wolves in sheep’s clothing?

For example, one so-called libertarian think-tank which espouses 'individual liberty, etc., etc.', would like people to believe that America’s record trade deficit is a “symbol of strength” (as if our salvation). While others are saying roughly the same thing, that logic is only accentuating the positive and eliminating the negative… although it’s a stretch to believe it a worthwhile positive.

Why? It’s because economic strength is no more than a house of cards. It’s foolish for economists to bank on such a variable… especially while in atrophy.

One need not be an expert in these matters to come to the right conclusion either. Anyone can see the rich getting richer, the big, bigger and the poor, poorer. Clearly, this testifies the arguments for unbridled trade are self-serving. It’s been allowed to happen because the mega-corporations are running rough-shod over governments. They have ‘bought’ the current trade policies.

So what about the ‘esteemed economists’ who also think unabated trade is a good idea? Well, nobody can fully grasp the complexities of international economics and - aside from political surprises - emotions and greed can play havoc with normalcy and predictions. And certainly one can bank on emotions and greed being constants. Further, economists are sure to overlook the consequences of high unemployment. It isn’t just a statistic, it’s a national disgrace and the furtherance of social decline. Social decline is a destructive force economists just can’t see.

Retaliation by China or American retaliation?

Only at first will China retaliate but will soon realize they have no choice but to adopt the western standard of fairness. Their status as an ‘economic powerhouse’ would be at stake... the Chinese economy is too dependent on exports to survive intact. Of course, compliance depends on the degree of toughness displayed… more importantly by America.

But if there are consequences, we must suffer them now because the damage increases as time passes. However, instant employment for most all Americans would rapidly temper any negative consequences. If a trade war ensues, so be it... it won't be a war America will lose. China, on the other hand, would be risking being thrown back to the Stone Age. We have, for awhile at least, the upper hand... as long as our knees don't buckle from Chinese threats.

However, the greatest of threats would come from the Sino-American transnationalists. You know who they are... the bastard companies that shipped our jobs overseas. It is they who could lose everything.

Well, good-by and good riddance.

But what about the losses the shareholders would suffer? Well, the jobless would say it's poetic justice.

Details, despots and determination

Despite our exports to China, whether agricultural products or otherwise, our huge negative balance of trade, being an annual deficit of around $700 billion during 2007 and 2008, China accounting for most of it, says our trade policies are insane if not treasonous. Only the ongoing recession explains the 40% drop in imports during 2009.

While American exporters are naturally happy with the status quo, and who can blame them… but that includes American companies operating in China exporting their once USA-made goods back to America. These Sino-American companies are greed-driven despots who have no interest whatsoever in America's future.

So what about the American-based outsourcers... despots too? Well, since outsourcing is often a matter of competitiveness, perhaps survival, it would be hard to say. Perhaps only if greed, and not survival, is testimony. But whether for competitiveness or survival, it all goes back to our import policies. Far fewer would find the need to outsource if 'fair' trade existed.

Yet, despite the exodus in production and jobs, Washington seems unmoved... totally unwilling to take a second look at policies. Like nincompoops in La-La land, congress merely stands there waving good-by.

Whatever justifications our government has for the current trade policies, they should be laid out on the table for all to see… although doubtful they will be worth the 14.6 million jobless. They certainly won’t be worth America as we know it.

Of course, there won't be any disclosure from the US government.

In that case, the public must insist upon FAIR trade outwardly, openly and aggressively. If we don‘t speak up, millions of Americans will continue to suffer… but soon more than just the 14.6 million (9.6%) now unemployed. Almost assuredly it will get worse. If to include the underemployed (part-time workers), more than 15% of Americans are now in desperate financial straits. Without the will to protect the wellbeing of Americans first, placed above special interests and foreign concerns, it won’t be long before more are bankrupt or homeless. In 2009 there were 43.6 million living in poverty, up from 39.8 million in 2008. There will likely be more reported for 2010 because, for many, unemployment benefits would have stopped.

It is clear, our trade policies are subversive polices which are sapping America of all its strength. Not suffering however are the Sino-American transnationalists. Their blatant disregard for America should be considered treason.

However, the bureaucracy in America must share the blame... they haven't made it easy to operate a business on American soil. There's a sea of red tape and regulations. One could say congress created these traitors... making congressmen the mother of traitors.

The American consumer and the seductive marketplace

But the American consumer must share the blame as well... aren't most of us always looking for the cheapest prices? Do we have the right to complain about the joblessness we helped create? On the other hand, bargain-hunting is human nature... it's the fly in the ointment in trying to find a cure for our import appetite. Do we want bargains or joblessness? We must remember, the buying habits of the jobless creates even more joblessness. Few of us have been putting America first... we've let our pocketbook rule.

However, consumers did not create this seductive and addictive atmosphere which will prove fatal to the American dream. Cheap labor is the poison always given great societies by the lesser ones. Mesmerized by the beating drum of avariciousness, Washington fell victim (but by choice).

Patriotism, if our buying habits would qualify as an aspect, would still be evident however if given a choice... if American-made products were still available. If it is an aspect - and it should be in light of the consequences - then especially patriotic are the owners of those companies who refuse to outsource. It takes guts to stand your ground in the face of the Chinese onslaught.

It should be clear... these bargain imports are Trojan horses.

Still, shameful buying habits or not, traitors or not, Chinese imports must be dealt with immediately. However, we must first create the political will to get tough with China by writing, calling and throwing a fit.

In the meantime, if you can't find American-made always insult the retailer and make do without. If you're lucky, think of the extra cost as being your investment in America... to keep the American dream alive. Besides America, the dream has no place else to go.

A.O. Kime

Resource Box: © A.O. Kime (2003)
A.O. Kime is the author of two books and 90+ articles on ancient history,
spiritual phenomena, political issues, social issues and agriculture which
can be seen at http://www.matrixbookstore.biz
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Let’s get the subject of tariffs out in the open where it belongs!!

Last modified: 03/07/16