Thread: Free Trade Trap: largest # & % long-term unemployment si

This is the largest number and percentage of long-term unemployment since the Labor Department started keeping the stats in 1948

Free Trade Trap

Wednesday, February 24, 2010
By Jon Taplin

I’ve been arguing for the last four months that we have entered a New Normal era in which the combination of a naive embrace of free trade, aggressive use of automation and a substandard education and retraining system, has left the United States in a position where it can no longer create enough jobs for its citizens. Yesterday, the New York Times ran a long piece on permanent unemployment that started with this chart.

This is the largest number and percentage of long-term unemployment since the Labor Department started keeping the stats in 1948. But this is not a new issue—it has been building for the last three decades.

During periods of American economic expansion in the 1950s, ‘60s and ‘70s, the number of private-sector jobs increased about 3.5 percent a year, according to an analysis of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During expansions in the 1980s and ‘90s, jobs grew just 2.4 percent annually.

It would be easy to blame Ronald Reagan, who started a war against unions for the loss of wage growth, but for me the real villains are the academic economists that sit at universities and proclaim the principles of free trade as inviolate.

I've been reading Free Trade Doesn't Work by Ian Fletcher for the past week and he makes a compelling case that tenured economists who propound the theories of free trade that the Wall Street Journal and the Cato Institute then popularize, are completely disconnected from the real world outside the academy.

For example, it has been obvious for 35 years now that America's economy needs to be internationally competitive. But many academic economists disparage the very concept of competitiveness, mainly because it has no accepted definition.


For Fletcher, the academic embrace of free trade is essentially applying 19th Century Laissez-Faire economics to global trade, when we have long since abandoned these ideas in our domestic economy. It is in fact a kind of unilateral disarmament against our global rivals who have never embraced free trade. Case in point: Chinese currency manipulation. Depending on who you talk to the Renminbi is 18-30% undervalued, because the Chinese government artificially pegs it to the dollar in order to make Chinese goods cheaper. This new form of Mercantilism, combined with an aggressive industrial espionage system to reverse engineer American and Japanese technology, puts the Chinese at a tremendous advantage.

We of course have aided our commercial rivals by American firms aggressive embrace of outsourcing. When Boeing decided to outsource many of the components of its new 787 Dreamliner to Asia and Europe, it not only surrendered its intellectual property, but ended up surrendering its control over the assembly and had to delay the introduction of the plane by two years. Ultimately they decided to end many of the outsourcing contracts and return to the US.

We are about to enter a new era of green manufacturing: solar, wind, nuclear, geothermal, high speed rail and hybrid cars. We need to build these technologies in America. Fortunately companies like GE are getting on board to return their factories to the U.S., but we also need to protect the start-ups against aggressive Asian and European dumping. As Fletcher points out the notion of the tariff is embedded in Article I, Section 8 of the U.S. Constitution. We should not be afraid to use it. Cynics will say we have no power over the Chinese because they would sell their huge portfolio of Treasury Bills if we ever levied a tariff on their solar panels. This is nonsense. As Bill Gross would tell you, the Chinese can't unload $1 trillion worth of bonds overnight and any large sale would become a self-fulfilling prophecy to the downside. Let's say they try to sell $1 billion of bonds worth $100 each. The next morning the value of their remaining portfolio of $900 billion might be cut by $100 billion as the market reacted.

As I've said for two years, America is entering a new era of lowered consumption and increased savings and investment. It is foolish to think that the 45 year old men in the New York Times article are going to find jobs in high finance or high tech. If we do not begin rebuilding our manufacturing economy we will enter an era of civil strife and conflict that will make the recent Tea Party rebellions look tame.

http://tpmcafe.talkingpointsmemo.com/20 ... rade_trap/

Absolutely!!

Judy's Five Step Plan To Fix Our Country:

1. stop illegal immigration
2. pass the FairTax
3. protect our trade
4. legalize/regulate/tax under 2 the illegal drug trade
5. drill baby drill

If these politicians aren't talking it, then you know they're not walking it.

Three biggest lies by our globalist politicians:

1. Free trade is good for our economy;

2. Illegal immigrants are a net benefit to our economy;

3. The problem with our job market is that we don't have national healthcare.

Nothing new really. Congressman McFadden was warning about this in the 30s.

"Mr. Chairman, when the Fed was passed, the people of these United States did not perceive that a world system was being set up here which would make the savings of the American school teacher available to a narcotic-drug vendor in Acapulco. They did not perceive that these United States was to be lowered to the position of a coolie country which has nothing but raw material and heart, that Russia was destined to supply the man power and that this country was to supply the financial power to an "international superstate". A superstate controlled by international bankers, and international industrialists acting together to enslave the world for their own pleasure?

"The people of these United States are being greatly wronged. They have been driven from their employments. They have been dispossessed from their homes. They have been evicted from their rented quarters. They have lost their children. They have been left to suffer and die for lack of shelter, food, clothing and medicine.

"The wealth of these United States and the working capital have been taken away from them and has either been locked in the vaults of certain banks and the great corporations or exported to foreign countries for the benefit of the foreign customers of these banks and corporations. So far as the people of the United States are concerned, the cupboard is bare.

"It is true that the warehouses and coal yards and grain elevators are full, but these are padlocked, and the great banks and corporations hold the keys.

"The sack of these United States by the Fed is the greatest crime in history.

"Mr. Chairman, a serious situation confronts the House of Representatives today. We are trustees of the people and the rights of the people are being taken away from them. Through the Fed the people are losing the rights guaranteed to them by the Constitution. Their property has been taken from them without due process of law. Mr. Chairman, common decency requires us to examine the public accounts of the Government and see what crimes against the public welfare have been committed.

"The man who knows or suspects that a crime has been committed and who conceals and covers up that crime is an accessory to it. Mr. Speaker, it is a monstrous thing for this great nation of people to have its destinies presided over by a traitorous government board acting in secret concert with international usurers.
"Every effort has been made by the Fed to conceal its powers- but the truth is- the Fed has usurped the Government. It controls everything here and it controls all of our foreign relations. It makes and breaks governments at will.
"No man and no body of men is more entrenched in power than the arrogant credit monopoly which operated the Fed. What National Government has permitted the Fed to steal from the people should now be restored to the people. The people have a valid claim against the Fed. If that claim is enforced the Americans will not need to stand in the bread line, or to suffer and die of starvation in the streets. Women will be saved, families will be kept together, and American children will not be dispersed and abandoned.
"Here is a Fed Note. Immense numbers of the notes are now held abroad. I am told that they amount to upwards of a billion dollars. They constitute a claim against our Government and likewise a claim against our peoples' money to the extent of $1,300,000,000 which has within the last few months been shipped abroad to redeem Fed Notes and to pay other gambling debts of the traitorous Fed. The greater part of our money stock has been shipped to other lands.
"Why should we promise to pay the debts of foreigners to foreigners? Why should the Fed be permitted to finance our competitors in all parts of the world? Do you know why the tariff was raised? It was raised to shut out the flood of Fed Goods pouring in here from every quarter of the globe- cheap goods, produced by cheaply paid foreign labor, on unlimited supplies of money and credit sent out of this Country by the dishonest and unscrupulous Fed.

Originally Posted by GaPatriot

Three biggest lies by our globalist politicians:

1. Free trade is good for our economy;

2. Illegal immigrants are a net benefit to our economy;

3. The problem with our job market is that we don't have national healthcare.

ABSOLUTELY!!

And please don't forget number 4.

4. "I'm with the IRS and here to help you."

www.fairtax.org