Free-Trade vs The Middle Class

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So-called Free Trade is destroying our national manufacturing base. According to a new report by the National Bureau of Economic Research, free trade relations with China, beginning in 2000, are responsible for cutting 30% of the manufacturing jobs we have in this nation. You can see this decline in the raw numbers. Around 2001, there were 17 million manufacturing jobs in America.

Today – that’s dropped off drastically to 11.5 million. And according to the Economic Policy Institute – nearly 3 million of those lost manufacturing jobs went directly to China since 2001. Thanks to so-called Free Trade, our policymakers are exporting those crucial blue-collar jobs that sustained a prosperous middle class, from the end of World War 2 all the way until the 1980’s.

And without those jobs, Americans are forced into the minimum wage service sector, asking, “Would you like Fries with that?” or greeting people at the door saying, “Welcome to Wal-Mart.” This is exactly what the transnational billionaires who push for these trade agreements want.

And until we drop out of these so-called free trade agreements, and once again begin protecting domestic manufacturing with tariffs or VAT taxes – the middle class will continue to shrink – and America will look more and more like a collapsed nation that’s exported all of its wealth to the rest of the world.

Thom Hartmann Administrator's picture
Thom Hartmann A...
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I think the Host simply mistitled his other essay. No problem.

As I wrote elsewhere, the world has not yet achieved "free trade." Many traded goods are still protected by tariffs, e.g., agriculture, and almost every traded good and service is influenced one way or another by non-tariff barriers.

The U.S. economy is in the middle of a long-term, structural transformation, from an industry-based economy to a service-based economy (post-industrialization). The United States is not alone in this transformation.

China, too, is in the middle of a long-term, structural transformation, from an agrarian-based society to an industrial-based society. Given time and peace, China will eventually transform into a service-based economy, too.

Notwithstanding trade policies, Fordist, assembly-line, manufacturing jobs that provided a good living for uneducated, unskilled workers in the United States are never coming back. Even if manufacturing stages a comeback in this country, the menial tasks once performed by union employees will be accomplished by robots.

Meanwhile, U.S. consumers continue to enjoy more choices of better quality goods at lower prices than ever before in the history of the nation, thanks in part to the liberalization of international trade.

stuff's picture
stuff
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Nov. 24, 2012 3:59 pm

Free Trade is Free for Money only and in fact puts more laws on the backs of Labor.

Free trade should more properly be called Corporate Welfare or International Corporate handouts.

Why do we pay an average of 23% on chinese goods flowing into the usa but our goods going into china face a 3% average tariff?

Free Trade is another term for Freedom of the rentiers to game the system and force unearned payments from society - luckily for them these corporate vampires control the Federal reserve and the printing presses and can use unlimited amounts of money to BUY our politicians - and then Amazingly the persons within government enact laws that give unearned profits to the largest predatory corporations and decrease the living standard of Americans thru their Corrrupt Trade Model.

The new Treasury Sec Jack Lew is thenwalking, talking example of the poisonous revolving door between the jackals on Wall Street and the government where every law benefits them to the detriment of the vast majority of citizens and the enviroment.

Just wait for TPP to pass -

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Scappoose
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Mar. 30, 2012 6:49 am

Stuff, the Corporate Globalist Crapola lumped under "free trade" is the extension of empire and piracy with regard to labor arbitrage and resource exploitation and theft. Oh yeah, the corporations make deals with local governments, etc. We get a lot of cheap crap from the sweatshops and the money goes right back with smaller multiplier effects. Not a great deal for the cheap prices. All the externalities dumped on us.

I have no trouble with honest competetive advantage and the reason I don't want to buy Oregon citrus and people elsewhere want our Pinot Noirs. Even taken as economists rather than as moral theologians, Smith and Ricardo do not endorse what is being done in their names and would be repulsed by the perversion of their vision of human equalty and liberty into our New Slave System.

Because you are a self-affirming economist, I encourage you to read David Graeber's DEBT and consider his argument against the current state of the discipline of economics. You may be able to counter his arguments, but they will stretch your thinking far beyond what you are posting as I read it. You do have a tendency to brevity which is great, but it leaves a lot of lines and their in betweens out. This is a very slippery ground of abstraction where reality has had a hard time with ideology. BTW, ideology only refers to those closed belief systems that do not reinterpret and change in the light of new information. Ideologies insist that reality must conform to their ideas. Getting ideology out of economics ought to be job number one.

drc2
Joined:
Apr. 26, 2012 11:15 am
Quote stuff:

Meanwhile, U.S. consumers continue to enjoy more choices of better quality goods at lower prices than ever before in the history of the nation, thanks in part to the liberalization of international trade.

Which is not the same thing as saying that the U.S. worker enjoys a higher standard of living or quality of life than ever before in the history of the nation.

And as I've remarked before, I disagree with the statement on its face that the goods are "better quality" and that they are at "lower prices."

chilidog
Joined:
Jul. 31, 2007 3:01 pm
Which is not the same thing as saying that the U.S. worker enjoys a higher standard of living or quality of life than ever before in the history of the nation.

Agreed, although well-educated, highly skilled workers have not suffered unduly under globalization; the real pain is experienced by uneducated, low skilled workers. I should think that the quality of life probably skews the same way.

And as I've remarked before, I disagree with the statement on its face that the goods are "better quality" and that they are at "lower prices."

You might be right; it is an empirical question. If I have time, I might try to find some data on the matter.

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stuff
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Nov. 24, 2012 3:59 pm

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