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KLW Commentary – It Wasn’t Free Trade
September 14, 2015
In the past 20-years we’ve seen an incredible transfer of wealth from the United States into the economies of other nations. This outflow was triggered by government decisions typically promoted to our citizens as “free trade” agreements.
Free trade, true free trade, benefits both sides of the equation. It is expensive and difficult to raise bananas in the American Midwest. It’s possible but very difficult. In Guatemala it’s a different story. They have the know-how, the infrastructure and an ideal climate. Raising wheat in Guatemala is its own different story. It is as difficult growing wheat there as it is raising bananas in Kansas.
Free trade sends our high quality American wheat to Guatemala in return for their delicious bananas. Both sides benefit. That is the sum total of benefits in real “Free Trade.” Both sides are better off. People everywhere, high and low in society, have their lives improved. More work, growing bananas or wheat, creates higher wages. More money in the pocket and more consumer choices at lower prices in the marketplace. That’s real free trade, both sides benefit.
So how did we as a nation end up 20-years into a global trade extravaganza in this financial distress? For today we have real and widespread distress in our land; one of 7 Americans on food stamps, 49-million working age citizens without full-time employment, 18 trillion dollars in Federal debt. How did 20-years of Federal trade policies lead to this day of so many being so hard pressed?
The answer is so obvious it reveals itself. It wasn’t free trade. As given in the example above about wheat and bananas real free trade benefits both sides. One side does not grow wealthy as the other moves to food stamps.
Our political leaders agreed to a distorted version a corruption of free trade. This was in fact a kind of managed trade …. but not managed to benefit the American middle class. This was and remains something more accurately called UN-FREE trade and certainly unfair trade.
These unfair trade deals are to real free trade what medieval bleeding of a patient is to today’s modern medicine. Except it is the wealth of the nation that has been bled. Look to the Far East for the evidence. In the past 20-years amazing building developments have grown out nowhere in China while icons of American prosperity rust and decay. Chinese airports are more imposing and impressive than most American university campuses. Don’t even try to compare today’s Detroit with Shanghai. These are not difficult examples to find to illustrate the results of Washington’s trade deals.
This transfer of wealth was not an accident of honest capitalism. This is not the invisible hand of free enterprise at work seeking more fertile grounds for business investment and growth. This was a bad game the politicians played. They dealt the middle class from a rigged deck where a few insider friends grew very wealthy as scrap merchants dismantling the great American jobs machine. They grew rich doing favors for the Chinese and others. We grew poor. Worse yet, the next generation, our kids can’t imagine what jobs, good jobs used to be available and easy to get and keep.
Why did we let this happen to ourselves? This is because the good-hearted American people were misled and deceived by those is political positions of trust. After all these years the people of the nation are now aware and they are outraged and beyond trusting Washington again on trade or many other issues.
Look at Donald Trump’s popularity. He has a simple message to Make America Great Again. What is his strategy? Stop being stupid in trade negotiations.
It seems a growing share of Americans agree with Trump. If the Washington establishment finds itself kicked to the curb and served with their own layoff notice in January 2017, they have no one to blame but themselves.
The American people deserved better than to have their prosperity run to waste by Washington policies. It is time for the Washington elites to pay the piper. This won’t recover what was taken from us. It is however a turn toward a new direction and new leadership that puts Americans first.
I’m Kevin Wade and that’s the way I see it.
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