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Will the "Change" campaign transform into a "Change" administration? On trade and the economy, "free trade" was a way to knock down sovereignty, national food and product safety standards, and national security. Not to mention our economy.
Free Trade has caused devastation. It is not a plan. It is stupid trade.
Smart Trade must replace it. Fair Trade principles can be included in Smart Trade. But Smart Trade is Fair Trade 2.0.
The ideological fantasies of the free traders have devastated those of us living in the real world. The result is that we are "unilateral free traders in a world of mercantilists." The phrase is more an indictment of unilateral free traders than mercantilists.
The point is that a national strategy on trade and the economy, to benefit America, is needed. The downstream effects are that other countries will benefit from us not being stupid. It is clear now that other countries - even if they were mercantilistic, export oriented parasites -do not benefit from us being stupid.
If you are running a large company that does not implode, you need
to have certain divisions to make it whole. Production, sales,
marketing, accounting, human resources, etc.
If you want a successful ecosystem that is self sustaining, you need to have a mix of plant and animal species that occupy a range of niches up and down the food, energy and fertility chain.
If you want a successful political-economy, you need a diverse economic ecosystem. At virtually any cost. I mean, the cost of maintaining a diverse economic ecosystem is virtually always worth the cost of not maintaining one.
Jobs put money in people's pockets in exchange for productive work. Government, agriculture, services, financial, health care, manufacturing, technology are all major job categories. We have decimated agriculture and manufacturing by offshoring our ability to make and grow things. Agriculture and manufacturing are the categories that make and grow things. They produce new wealth. We must have these sectors strong to support the other sectors.
I am not diminishing the importance of the other sectors, but we must maintain a balance. Government, health care and financial sector jobs are too large a proportion of the job market. Service sector jobs ditto. A focus on production is needed. A global power will decline without a greater focus on production of food and goods.
Free trade ideology allowed foreign currency manipulation, border taxes and subsidies to cannibalize our productive industries. It is called offshoring. The China Price turns out to be really expensive.
How efficient is it to produce goods 7,000 miles away and ship them here? It is not efficient. The low foreign prices are fake. The transportation, delay and transaction costs are high. Foreign-government-created discounts hide those costs. Currency manipulation in China is a 35% discount and subsidy unrelated to market factors. Border taxes and rebates in 144 other countries, at an average 17% level, are tariffs and subsidies that have nothing to do with markets.
China's government still owns the majority of the economy there. Government money creates and maintains major industries there, whether steel, banking or apple production. Intel received a free factory in China as an incentive to move from Colorado Springs. Market forces were not involved.
Other countries have the right to set their economic policies, but we have the right to respond. We have the obligation to craft a national strategy on trade and the economy that keeps us economically strong. A balanced economy that keeps producing... and that produces jobs. This is the best insulation from financial crashes. Folks with good jobs are irritated, but not devastated, by drops in the Dow. Farmers that produce for our growing U.S. food market pay little attention to the Dow.
John Hansen of the Nebraska Farmers Union, and a member of the CPA board, says we have "traded theoretical access to other markets for real access to ours." This has not worked. "Trade" has increased! says USDA and USTR. But they oddly include imports in their "increased trade" meme. And the sheep that listen don't sort out the difference. We thus lose market share in the greatest market in the world. The market that surrounds us.
This is not a protectionist position. It is a pro-trade position. A Smart Trade position. A position against stupid trade of unilateral disarmament. We will not start a trade war. We are in a trade war. We have the market everyone wants access to. Congress has the jurisdiction to control the borders and regulate foreign trade. That power needs to benefit the U.S. first, and the derivative effect is that it will benefit the world in the short and long term.
The Dow has dropped 40% in one year. But other countries' stock markets have dropped more. Our GDP growth has dropped. But other countries' GDP has dropped more. You can be a nationalist or an internationalist. The conclusion is the same. Smart trade will benefit us and everyone else. Neutralizing foreign mercantilism is a good thing.
A national trade and economic strategy must be created, followed, and revised. It should eliminate the current accounts deficit, and some say reverse it. It should balance the economy. It should enforce those contracts between countries otherwise known as trade agreements. It should bind USTR to negotiating any new deals that comply. It should modify domestic trade laws to comply. It should not reverse offshoring and protect our sovereignty. It should allow food and goods into the stream of commerce that meet our safety standards.
This is Smart Trade.
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