Thom Hartmann: Picking Apart One of the Biggest Lies in American Politics: 'Free Trade'

[marmar]

Picking Apart One of the Biggest Lies in American Politics: 'Free Trade'
It just enriches huge companies at everyone else's expense.

By Thom Hartmann / AlterNet August 19, 2015


In 1992, Ross Perot won almost 20% of the entire presidential vote on the single issue of stopping so-called “free trade.” Today, several presidential candidates are gaining huge traction with similar opposition to NAFTA, CAFTA, and the upcoming Southern Hemisphere Asian Free Trade Agreement (SHAFTA, now called the Trans-Pacific Partnership or TPP).

Time has proven Perot right, and his arguments were consistent with a long history of American industrial success prior to the “free trade” era of the past 30+ years.

Our radical experiment of so-called “free trade” has clearly failed America, although few Americans know why or how. Here’s the back-story.

George Washington on “Made In America” goods

On April 14, 1789, George Washington was out walking through the fields at Mount Vernon, his home in Virginia, when Charles Thomson, the Secretary of the Continental Congress, rode up on horseback. Thomson had a letter for Washington from the president pro-tempore of the new, constitutionally created United States Senate, telling Washington he’d just been elected president and the inauguration was set for April 30 in the nation’s capital, New York City.

.....(snip).....

How badly Reaganism and “free trade” have damaged us

When Ronald Reagan came into office, as the result of 190 years of Hamilton’s plan, the United States was the world’s largest importer of raw materials; the world’s largest exporter of finished, manufactured goods; and the world’s largest creditor.

After 34 years of Reaganomics, we’ve completely flipped this upside down. We’ve become the world’s largest exporter of raw materials, the world’s largest importer of finished goods, and the world’s largest debtor. We now export raw materials to China, and buy from them manufactured goods. And we borrow from them to do it. Our trade debt right now stands at over $11 trillion, and it’s the principle reason why one-seventh of all assets in the United States are foreign-owned. ...............(more)

http://www.alternet.org/economy/picking-apart-one-biggest-lies-american-politics-free-trade

[Octafish]

1. Free Trade is good for the owners, not good for workers. Take Detroit...

Here in Michigan, there aren't as many UAW members as when NAFTA got passed. A lot less. NAFTA went into effect on Jan. 1, 1994.



It's not all bad, though. What were once-bankrupt car makers and car suppliers are doing great, hiring like crazy. The problem for U.S. workers is that most of the hiring is for new plants overseas.

Consider the case of DELPHI Automotive, a parts maker spun-off when General Motors couldn't make it sufficiently profitable:

Talk about a turnaround. Delphi's epic 2005 bankruptcy exacted high costs on communities, unions and the pensions of salaried retirees. Yet the creative destruction of the four-year ordeal, shaped by management, private equity investors and the demands of the Obama auto task force, produced a global supplier that now offers 33 product lines from 141 manufacturing sites in 33 countries and employs 160,000 worldwide — only 5,000 of which work inside the United States.

-- Daniel Howes, Detroit News

http://www.detroitnews.com/story/business/columnists/daniel-howes/2015/02/18/howes-delphi-surges-quietly-one-regret/23655511/

The above is from a business columnist describing the good work of DELPHI's then-president in turning the company around. "Good work" is, of course, defined in maximizing shareholder value. "Shareholder," seems to me, is defined as "Owner."

[Elwood P Dowd]

2. K&R. Its sad that a small group of DUers still embrace this failed policy.

Just the mention of "Free Trade" gets them all warm and fuzzy. Problem is, the repukes (and some Dems), are just using the term "Free Trade" to pass corporate investment/outsourcing legislation that almost exclusively benefits corporate America and the 1% at the expense of middle class American workers.

[pampango]

5. Perhaps some DU'ers think that "free trade" works fine in countries without 'right-to-work' and

regressive taxes.

Witness Sweden, Germany and many others. Much more 'free trade'; much stronger unions and middle classes. Why? They don't shoot themselves in the foot with anti-union laws, tax cuts for the rich, deregulation and weak safety nets.

FDR promoted more trade, stronger unions, better regulation and stronger safety nets for a reason. Apparently Sweden and Germany remain convinced that he was right.

[Omaha Steve]

3. K&R!

[1939]

4. We used to run the whole government on the take from import tariffs

Maybe we should eliminate the income tax and use import tariffs to run the government and protect domestic workers.

[pampango]

6. "The Hidden Progressive History of Income Tax" when it replaced tariffs as government funding.

The income tax was the most popular economic justice movement of the early 20th century. What happened?

Today, we are supposed to hate paying taxes. They are our “tax burden.” We vote for politicians who will reduce our taxes, even if that means destroying the welfare state. Conservatives’ century-long war against taxes has paid off by convincing everyday Americans to think taxes are a horrible thing that pays for government waste.

Our ancestors knew this was not true. The income tax was the most popular economic justice movement of the late 19th and early 20th century. This truly grassroots movement forced politicians to act in order to stay in office, leading to the 16th Amendment to the Constitution in 1913. That’s right, the income tax was so popular that the nation passed a constitutional amendment so that the right-wing Supreme Court couldn’t overturn it.

Income and Tax Inequality in the Late 19th Century

Everyday Americans hated the tax system of the Gilded Age. The federal government gathered taxes in two ways. First, it placed high tariff rates on imports. These import taxes protected American industries from competition. This allowed companies to charge high prices on products that the working class needed to survive while also protecting the monopolies that controlled their everyday lives. Second, the government had high excise taxes on tobacco and alcohol, two products used heavily by the American working class.

These forms of indirect taxes meant that almost the entirety of federal tax revenue came from the poor while the rich paid virtually nothing. This spawned enormous outrage. The poor had a model in creating an income tax—President Abraham Lincoln, who instituted the nation’s first income tax to pay for the Civil War. Lincoln’s Revenue Act of 1861 created a graduated tax on everyone who made at least $800 a year, allowing him to pay for the war. Although a grand success, Republicans pulled away from it as they backed off of racial equality in the late 1860s and it was overturned in 1872.

http://www.alternet.org/labor/hidden-progressive-history-income-tax?akid=9361.277129.2KDGDd&rd=1&src=newsletter706781&t=14

Progressives pushed for income taxes to replace tariffs. After the adoption of The 16th Amendment In 1913 republicans were desperate to reverse it. The next time they controlled the government, 1921, they raised tariffs and lowered income taxes which the rich, then as now, hated.

[1939]

8. Precisely

The elimination of protective tariffs was a great progressive ideal (like eugenics) which has turned around and bitten us in the ass.

[pampango]

9. We trade less than any other developed country. The "protective tariffs" that Hoover and Coolidge

passed and FDR reversed did not help us then. Progressive countries now do not use them either.

[1939]

10. OK then

Protective tariffs are bad. That is a position held by the Democratic Party back to the Jefferson-Jackson days. Free trade for all. Now why does Hartman think that free trade is bad (the original OP)? Has the removal of tariffs and the free movement of goods bit us in the ass because of the resulting movement of factories and jobs to lower wage countries?

[pampango]

11. Apparently FDR, along with modern Sweden and Germany, were and are not as afraid of 'lower wage

countries' as some modern Americans are.

Protective tariffs are bad.

Not according to Warren Harding, Calvin Coolidge and Herbert Hoover. They were big supporters of protective tariffs and lower taxes. Their rich corporate supporters demanded both. After a decade of high tariffs and low taxes, the US had a level of income inequality that we still have not match today despite our modern 1%'s best efforts.

It is not surprising perhaps that FDR decided that lower tariffs and higher taxes were the way to go. That belief was consistent with that of the progressives who pushed through the 16th Amendment in the face of tremendous resistance from the 1% of that era.

If trade with 'lower wage countries' was the source of middle class problems, our middle class would be much better off than that of Sweden or Germany which trade with them a lot more than we do. Needless to say our middle class is not better off than theirs.

[Romulox]

14. FDR wore pants. Lloyd Blakenfeld wears pants! Need I say more?

You wouldn't want to go against FDR, would you?

[Romulox]

13. You're dancing with perhaps the most rightwing poster here. It's a waste of time. nt

[pampango]

15. Most people do not consider FDR and Sweden to be models of right wing economic policy.

You are 'unique' in that respect.

[Romulox]

16. You are this board's champion of Neo-Liberal economics--the economics of the Hard Right. nt

[pampango]

17. Thank you for the title but I don't consider FDR and Sweden as "Hard Right" economic practitioners.

Which is why you are so 'unique' on DU.

[Romulox]

12. Free Trade isn't "Reaganism"; It's CLINTONISM and OBAMA-ISM.