The NewsHour last night covered the topic of free trade and how the 2006 election results tie in with how most Americans feel about international trade deals in general. Now frankly, I love how every time the media wants to talk about politics, they mention Iowa voters. It is almost trendy now to associate political debates with states like Iowa and Missouri. However, in the case of trade, NewsHour had it right. People here in Iowa, in general, do not like free trade. They see it as hurting their jobs and leading to anxiety over how their children will prosper in a diverse world economy. Speaking as someone who lost his job this last Spring and who had to hunt down a new job, I can tell you that it is not just the poor that have this notion that international trade is bad for their own individual economies, but the middle class who is deeply concerned about the economic situation. The continuing trends of rising healthcare costs, job insecurity, and minimized educational opportunities are causing the middle class to panic. We pay more in insurance premiums, prescription drugs, student loans, while at the same time working more dynamic and less secure jobs. Tax cuts do nothing to minimize these stresses, in fact they make the situation worse. As government removes more social programs and raises interest rates, the middle class sees how bad the poor are doing, and know that they are exactly three paychecks away from becoming poor themselves. It is in this climate that politicians who talk about NAFTA and other such international trade deals, will find little support for such policies.
Perhaps we as a nation have brought this economic stress upon ourselves by not saving enough, by choosing to use our homes as barter for taking on more debt, and by being more interested in individual excesses, but the reality is that the middle class does not see free trade as fair trade any longer. Politicians will have to learn to speak about trade in a more convincing manner. But if people continue to see climbing credit card interest rates, higher student loan rates, and rising prescription costs, I doubt middle class voters will be willing to listen to any debate on free trade.
I believe in free trade unless the foreign business is using slave labor and violating human righs as countries like China often do. I think we should be stricter with countries like China that violate human rights but the politicians seem to not want to do anything.
Free trade is the most efficient form of business but many countries including our own screw this up by subsidizing businesses and farmers which gives them an advantage (promoting more growth) at the taxpayers expense and foreign importers gain.
There really is no such thing as free trade. There is only trade. Ironically one of the countries that is arguing the same debate is actually Russia. A growing anti-immigration sentiment, along with fear of trade has taken hold in the country. Some believe it is in part due to the growing divide between rich and poor classes. The rise of oil prices has been good for the elite classes in Russia.
Free trade is what made the US strong initially as the states traded amongst each other without tariffs. But then the North started raising tariffs with other countries so that the South would trade more with them along with slavery led to the Civil War. Taxing trade too much has led to many revolutions (Boston Tea Party). Protectionism is not a good idea as it just breeds inefficiency and higher costs for all but free trade can also make you dependent on foreign imports which can cripple you if say oil prices spike.