ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Monday, April 18, 2005

Such Ignorance

This is why the Left just can't be trusted with economic policy. David Sirota, of the Center for American Socialists Progress, just doesn't "get" free trade, although the issue has been pretty much settled unless you are a Naderite. David cheers on Evan Bayh for his willingness to block the nomination of a free trader a Bush Administration post and suspects that he's doing this for his '08 presidential run. It certainly is a sign of our times with there really is no such thing as a free trade liberal that makes up the party's base. (Where are you, Slick Willie?)

I was totally behind Clinton/Gore's position on NAFTA and the balance sheet for creating the Free Trade Zone is clearly in the black, although the original promises made by its proponents (increase in jobs) was a misleading - free trade does not create or destroy jobs, it reallocates them. However, history has proven time and time again that free trade works and the cost of protectionism is never understood by its proponents.

  1. Question: Who was the last "Protectionist" President of the United States?
    Answer: Herbert Hoover

  2. Question: When he signed the Smoot-Hawley Tariff Act, what was the result?
    • A - Protection of American Jobs
    • B - Deepening of The Great Depression

    Answer - B
Here's an snippet of idiocy from David Sirota:
At first glance, President Bush's nomination of Rep. Rob Portman (R) to be the new U.S. trade representative may seem like an encouraging sign. Portman, after all, is from Ohio – a state ravaged by corporate-backed free trade deals. As one study shows, Portman's state has lost more than 52,000 jobs because of our unfair trade policy. Naturally, then, you'd expect him to have a particularly good grasp at how America's current trade policy is hurting our country.

Instead, though, Portman has been one of the most outspoken advocates for this disastrous trade policy. As a senior member of the congressional committee that oversees trade policy, he has supported every major piece of free trade legislation that's come before him, while pocketing hundreds of thousands of dollars from the industries that push these deals. These trade deals have been deliberately swept clean of any provisions to make sure our trading partners adhere to wage, environmental and human rights standards, thus forcing Americans to compete in a race to the bottom with some of the most desperate workers on the planet.
Race to the bottom??? What happens when a foreign country's wages increase to our standard? Do we stop trading with them? (Did we stop trading with Japan or did our wages decline to levels of the Japanese in the 70s when their cars were beating ours in the marketplace? Do we still trade with Canada? England? Germany?) What Sirota is calling for (forcing Chinese wages to be increased to meet US wages) is ridiculous. First, Chinese workers are less productive than US workers and thus command a lower wage. What happens if you increase their wages, but get the same productivity? Mass unemployment as businesses refuse to pay extra for the same prodcutivity. Why is it that the Chinese are paid wages lower than the US? Exploitation by the US Corporations? No, it's because they're not as good as the US workers (and also that the US manufacturing worker has artificially high wages thanks to the unions).

Is the Indian outsourcing of call centers really problematic? 10 years ago, HelpDesks here in the US were proving grounds for green techies and they bitched & complained about them 24 hours a day. They HATED those jobs... and now that they're being performed by a guy in India, what do you think the green techs are doing now? They're performing more complex and more valuable tasks in the IT industry. Given the demographic trends of our country, outsourcing of IT to India won't even be on the radar screen in a few years...we will have more consumers than producers in this country and will have to rely on immigrants (see Guest Worker program by Bush) and foreign outsourcing.

Sirota and his buddies on the Left could use a simple Econ 101 class from their local community college. Or they could just listen to some of their favorites from the Clinton era, such as Paul Krugman (now of the NYTimes)or Alan Blinder (former econ advisor to President Clinton), who demonstrate here, here, and here that free trade benefits all participants. This has been proven time and time again throughout history.

Here's a list of measurements showing progress throughout the world as free trade has increased.

If Krugman and Blinder don't satisfy, try this from Greenspan... or this from Jagdish Baghwati (Krugman's professor):
Far too many of the young see capitalism as a system that cannot meaningfully address questions of social justice. Many of these youthful skeptics seem unaware that socialist planning in countries such as India, which replaced markets system-wide with quantitative allocations, worsened rather than improved unequal access. Such socialism produced queues that the well connected and the well endowed could jump, whereas markets allow a larger number of people to access their targets. Capitalism is a system that, paradoxically, can destroy privilege and open up economic opportunity to many -- but this fact is lost on most of the system's vocal critics.


Many of today's young, virulent anticapitalists experienced their social awakenings on campuses, in fields other than economics. English, comparative literature, and sociology are all fertile breeding grounds for such dissent. Deconstructionism, as espoused by the French philosopher Jacques Derrida, has, with its advocacy of an "endless horizon of meanings," left the typical student of literature without anchor. Derrida's technique is to deconstruct every political ideology, including Marxism. Typically, however, it is capitalism that becomes the focus of these efforts, not Marxism. And this process often has nihilistic overtones, with the paradoxical result that many of its followers now turn to anarchy.
Message to Sirota - In our lifetime (assuming current events continue and Nader & is ilk never win the presidency), we will see a Global Free Trade Area, benefitting all countries.

As Adam Smith put it in 1776:
It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy... If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.
Now, only a fan of PolPot of Mao could argue with that statement...

I should've read Sirota's bio before asking him to reconsider his protectionist stance. This sheds some light on why it's so easy to make fun of him:
Author Bio

David Sirota is a progressive political strategist who is currently writing a book on the middle-class economic squeeze for Crown Publishers. He was formerly the chief spokesman for Democrats on the House Appropriations Committee and, before that, the press secretary for U.S. Rep. Bernard Sanders (I-VT)
Bernie is the only member of the Socialist Party in US Congress. Sirota's from the far, socialist left of the political spectrum. So, he probably doesn't believe in capitalism or free markets domestically, much less when you're talking about trade with other countries. This also explains why the Center for American Progress sounds sooo much like this group. Heck, if you go out to the DNC website, I'm sure you'll see parallel takes on the issues of the day. I s'pose that Bush does look like an ultra right winger when you're that far to the left. When Clinton/Gore, Krugman, and Blinder are "right wingers" to you, it's probably best if you never get political power.

Your Co-Conspirator,
ARC: St Wendeler