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  • Free Trade Fact of the Day

    The protectionist drift of the Democratic Party has free-market proponents across the pond worried. The Times of London writes:

    Mr Obama claims, for instance, that “entire cities…have been devastated” by Nafta, the North American Free Trade Agreement signed in 1993, which he blames for destroying a million American jobs, when in fact total employment has risen by 27 million since 1993, when the trade deficit with Mexico, his favourite scapegoat, accounts for a hardly significant 1.7 per cent of the US economy — and when, overall, job losses attributable to trade rather than to higher productivity amount to only about 2 to 3 per cent of American layoffs.

    Economic nationalism is perilously contagious. Politicians need to confront popular anxieties about free trade by doing a far better job of explaining how much we gain from the global expansion of wealth and markets that it stimulates – and how much we stand to lose from protectionism. It is precisely because Peter Mandelson increasingly performs this task, that Nicolas Sarkozy would happily throw his head to the poor of Africa. Brains are a typically French delicacy.

    Posted in International [slideshow_deploy]

    6 Responses to Free Trade Fact of the Day

    1. Matt, IN says:

      I greatly favor free trade, but the other side of that coin is that we as citizens ought to understand that how we spend our money has a direct effect of the world and the countries in them. For that reason, I spend a little extra to support the US and US allies over China and Vietnam….I will not support communism or oppression. These things are more important than money.

      Fair Tax would put American companies at good grounds for free trade proposals…we tax it all the same…we stop driving away American jobs to poorer, enemy countries.

    2. Greg, DC says:

      I agree that the FairTax has many appealing elements, but when we could have a consumption tax by simply making savings tax-free why should we risk having a national sales tax AND income tax, since no one thinks the Constitution will be amended to ban income tax. Why should we create a system where every American gets a government "rebate" check every month? The Democrats will offer larger rebates every election and it will be overwhelmingly popular. I can't think of a quicker path to socialism.

    3. Dominick, NY says:

      The Fair Tax is not the answer, in part because of what Greg said, but mostly on political-reality grounds. Right now even the large bloc of people who favor "tax reform" do not have a unified plan and about half of the pro-reform crowd is very much anti-Fair Tax (fairly or unfairly, the reasoning is not the point). It simply is not going to pass into law (with or without a repeal of the income tax), especially where Democrats control Congress.

      In the alternative – and working with the system we currently have (as bad as it is) – there should be more focus on McCain's proposal to lower corporate income tax rates. Right now, we have one of the highest rates in the world. It isn't just "cheap labor" that drives businesses out of the country, it's onerous taxation and regulation. If you can be headquartered in parts of Europe where corporate tax rates are incredibly low (Czech Republic 26%, Poland 19%, Ireland 12.5% as of 2006), why would you stay in the U.S. and pay 35% or more? In 2006, only Japan had a higher corporate tax rate than the U.S. – even the "socialist paradises" of Scandinavia have rates lower than us (28%).

      So while the Fair Tax might be nice, we probably can't get it through. We can however, find ways to make our tax regime more competitive against even other industrialized nations. Once we do that, the jobs will follow – American workers are still among the most productive, and they can prove their value.

    4. John C Atlanta Geor says:

      "The Democrats will offer larger rebates every election and it will be overwhelmingly popular."

      The rebate check program was a REPUBLICAN program not a democrat one. All hype, no substance.

      Todays GOP is for lower taxes (but not when they are in control), Smaller government (but not when they are in control), enforcing our boarders (but not when they are in control), supporting the military (but not when they are in control), less pork projects (but not when they are in control), increased states rights (but not when they are in control). The only thing they actually do that they claim to do is hate the majority of American that do not buy into the false advertising. A sad death for a once proud party.

    5. Nathan, Montana says:

      NAFTA as we know it is a "yet to be ratified" proposition.

      Agricultural producers here and elsewhere are currently watching beef and grain, among other commodities, sail past their farms and ranches bringing Canadian commodities to market in the US. Cattle producers note that Canadian trucks are hauling 10+ loads per day in one location. The trucks are equipped with nearly 900 gallons of fuel on board which would allow them to fuel at their loading point in Canada, cross the "boarders" as John C. in Atlanta says, deliver their Free Trade Payload and return home. All this would be accomplished without even contributing buy purchasing fuel that is taxed to maintain and rebuild our roads and bridges.

      This is just one instance of lunacy related to NAFTA that has achieved "savior status" among the uneducated.

      Clinton's executive order initiated NAFTA and now the general public accepts it as if it were actually ratified via the proper channels. Where is the legality?

      Just because something is popular doesn't make it legal or just.

      What happened to taking care of ourselves? Is there something wrong with self sufficiency?

      For those who don't know, NAFTA is killing more than it is saving as far as agriculture and commodities go. Other industries are feeling the same but I can't vouch for them personally.

      Economic numbers can be stretched and interpreted in hundreds of different ways to suit the presenter. Hopefully logic will prevail before we are all broke while we buy our neighbors' wares.

    6. Ralph, NY says:

      Sadly, the GOP acted like Democrats in doling out "pork" in Bush's two terms.

      However, Regan reduced taxes and rebuilt our military after Carter decimated it. Regan also trimmed government somewhat, but was stopped short of real progress.

      President Bush also reduced taxes and rebuilt our military after it was neglected by Clinton. His popularity rating is low but still much better than the Democrat Congress.

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