Before a Democrat gets in the White House and destroys our economy with protectionist nonsense, more people should stand up and defend NAFTA:
His campaign claims a million jobs have vanished because of the deal. That sounds devastating, but over the last 14 years, the American economy has added a net total of 25 million jobs—some of them, incidentally, attributable to expanded trade with Mexico. When NAFTA took effect in 1994, the unemployment rate was 6.7 percent. Today it's 4.9 percent.
But maybe all the jobs we lost were good ones and all the new ones are minimum-wage positions sweeping out abandoned factories? Actually, no. According to data compiled by Harvard economist Robert Z. Lawrence, the average blue-collar worker's wages and benefits, adjusted for inflation, have risen by 11 percent under NAFTA. Instead of driving pay scales down, it appears to have pulled them up.
Manufacturing employment has declined, but not because we're producing less: Manufacturing output has not only expanded, but has expanded far faster than it did in the decade before NAFTA. The problem is that as productivity rises, we can make more stuff with fewer people. That's not a bad thing. In fact, it's essentially the definition of economic progress.
We're not the only country facing that phenomenon. China makes everything these days, right? But between 1995 and 2002, it lost 15 million manufacturing jobs.
Even if the candidates don't want to acknowledge the gains of the last 14 years, it's hard to see how they can blame NAFTA for economic troubles in Ohio or elsewhere. The whole idea was to eliminate import duties in both the United States and Mexico (as well as Canada). What everyone forgets is that we got the best of that bargain, since our tariffs were very low to begin with.
That central point tends to get overlooked in all the demagoging of NAFTA: It was about lowering barriers, and the net effect was to level the playing field in our favor. If we're going to survive, let alone thrive, in the global economy that no one is going to stop, lowering the barriers as much as possible with as many countries as possible has to be the goal.
Comments
Complete and utter unsubstanitate nonsense from a free market source.
ANYONE who works in nmanufacturing knows this pro "free" trade is pure crap.
Take a drive thru your local industrial parks and then decide for yourself how goo "free" trade has been for US manufacturing
And its not just democrats who are concerned about this - real conservatives are concernaed about the major loss of manufacturing technology and infrastructure to potentialenemies like communist china
Read Buchanan's "Day of reckoning" and "The Death of Manufacturing" he lays it all out there with real facts and figure - not some unsubstatiated anecdotes like those you find on pro trade free maket blogs such as this
AJ, if you don't sell your widgets to the world, only to your own countrymen, how would you sustain an economy? I'm assuming you advocate not trading with anyone outside the U.S.?
As for the death of manufacturing, that's bullshit. More goods are manufactured today than ever before, but there isn't a $40 an hour "attendant" standing at the machine watching it anymore.
Times change, adaptation is tough but must be done.
Both McCain and Osama are free-traders, as am I. When two people engage in free trade, they each give up something they consider less valuable for something they consider more valuable. Both parties are enriched.
The real question is "why should there be trade barriers between Detroit and Windsor, separated by only a river, yet not between Fort Wayne and Honolulu, half a world away?"
The problem with NAFTA isn't that it's free trade, but that it's not. That doesn't mean we scrap it; it means we negotiate a better NAFTA to replace it.
We really need to change our tax system, so that we tax outgo instead of income. Countries with a VAT rebate the tax to manufacturer on exports, but charge the tax on imports. Countries depending on income taxes and real estate taxes charge taxes whether production is for import or export. Consequently, in a VAT country, our products are taxed by both their country and ours, while theirs are only taxed once. In our country, our products are taxed once, and theirs are not taxed at all.
Huck's FAIR tax is stupid, but it's a start - and a VAT would make american workers more competitive, both here and abroad.