Thursday, April 23, 2009

Campaign like a Democrat, trade like a Republican

A truly disturbing bit of economic news has come from Obama’s new trade representative Ron Kirk. He has stated that it is the intention of the Obama Adm. to go ahead with the trade deals brokered by the Bush Adm. with Panama, Korea and Columbia. They also intend to revive talks with the WTO that broke down last July over agricultural commodities. Remember not being able to buy rice? That’s what you get with "free trade".

Obama and Kirk are making all the usual vague promises about protecting American workers. Apparently everything Obama said during the campaign about protecting American workers from these destructive "free" trade deals has now been "out sourced".

To recover from their lost decade; Japan quietly rebuilt its domestic industries. Japan’s government does have a huge debt load even compared to the US, but the difference is that their debt is entirely investments from their retirees. Japan doesn’t owe trillions to China and Saudi Arabia. Japan’s standard of living continues to improve as ours declines. Japan protects its economy from "free trade"; China, India and Europe do as well.

We cannot trade our way out of the mess we are in; we cannot live on a service economy (giving each other haircuts); we cannot rebuild by padding the balance sheets of insolvent banks. We need to make the things we use or accept a third world standard of living.


Bukko Boomeranger said...

I hate to always be cynical, because I wanted a preznit I could believe in. But my depressing side says "What do you expect from a guy out of the University of Chicago?" (Home to the Milton Friedmanite School of Economics, of course.) Malloy has said it many times, no doubt you have too -- the United States isn't run by its own government, it's run by the WTO.

The sad thing is, so many people believe in the "free trade" gospel. They would be quick to criticise anyone who believed in totally open borders when it comes to illegal immigrant labour (on second thought, maybe they wouldn't, but I would) but they believe in "no borders" when it comes to imported goods.

The import flood will stop when the U.S. dollar, and probably all other fiat currencies, collapse in value. When your money is worthless, you can't use it to pay for imported crap. It doesn't have to be that way, but as currency systems around the world race to degrade themselves, we're headed back to the days of gold and barter.