I was watching a program last night on PBS about the ongoing debate regarding free trade and agreements such as NAFTA and now CAFTA. I consider myself a fiscal conservative, and while I favor free trade in general, so far I find myself very concerned about such trade agreements. Though the topic involves politics, it is really an economic issue, so I'm posting this here. Maybe members with background in economics can help address the matter. To start, here is information against CAFTA:
"Don’t trust the fox to protect the chickens." -- Obvious to those who can recognize the "fox" - I highlighted a couple of points that are contrary to US foreign policy, or should I say what is purported to be our foreign policy, most specifically Bush's reasoning for spreading democracy in the Middle East. Yet in reality he continuously supports big business in ways that seem contrary to such a goal.Economic Impacts
...America has long been admired as the land of opportunity. In America, hard work was rewarded. Most Americans could better themselves and look forward to rising prosperity.
But this American dream is in trouble. Not because there is some new threat of foreign competition from low-wage countries. Nor is it because greedy American businessmen, ever eager for profits, have suddenly discovered how they can cut costs by shifting manufacturing and investment abroad to these cheaper labor markets.
Without a recognition of the underlying causes, it is all too easy to blame symptoms and support cures that actually aid the disease. Surprisingly, destructive government programs and agencies -- in effect for years -- are responsible for much of the loss of quality American jobs and manufacturing. These programs and agencies encourage businessmen to invest abroad with both a carrot and a stick. [See "Engineered Extinction" under "Recommended reading" below.]
Wielding the stick are the oppressive regulatory agencies that drive up the cost of doing business here at home. Other government agencies, such as the Overseas Private Investment Corporation hold out the carrot by providing incentives and assuming risks so that businesses find it advantageous to invest abroad, even in Communist nations such as China.
Rather than reversing these destructive policies, internationalists are cynically seizing the crisis they helped to create in order to sell even more destructive proposals as cures. The proposal for a Free Trade Area of the Americas is the prime example.
An essential step toward activating Congress to reject the FTAA agreement is to help a substantial bloc of American opinion molders understand the real intentions of the internationalists. Then these opinion molders can withdraw their trust from the architects of America’s decline.
The attack on America’s productive capacity is virtually universal. Areas threatened include:
· Hi-Tech Jobs
· Resource Industries
The classical free trade model shows how high-wage nations and low-wage nations can trade with each other for mutual benefit through the principal of comparative advantage. [Voluntary trade should be mutually beneficial because it’s voluntary.] But the basic model does not account for government policies that encourage major movements of labor (immigration) and investment. We should never underestimate the power of misapplied government to create a ghost town or impoverish its people.
The question is: If hi-tech jobs, manufacturing jobs, service jobs, and resource industry jobs are shifted abroad, what will be left for Americans to produce so that they can purchase in the world economy and enjoy a rising standard of living (or even maintain where they are)? When the plans of the globalists are understood, the answer is grim. They have targeted the American middle class for extinction.
The promised help for the less fortunate throughout Latin America is also a fraud.
To see how our Latin American neighbors can truly prosper, let’s consider the source of our own prosperity. Why is it that in America, in just three generations, man managed to outstrip the world's total progress for six thousand years? How was it possible that our republic, with less than seven per cent of the earth's population, was able to create more wealth than all the other billions of people in the world?
The reason is that Americans have made more effective use of their human energies. And they were able to do so because they were blessed with liberty -- the mainspring of all human progress.