No No NAFTA?

I am always intrigued when I read right-on opinion pieces by authors in academia who’ve gained their knowledge through study and often have no firsthand experience within the discipline they pontificate over.

These scholars comprehend and imagine complex systems of interaction without actually enduring consequences of these interactions.   They combine their academic experiences with strong intellect, attach good education, and they extrapolate wisdom that many of us must experience emotionally firsthand to understand.   We pay reverence to these personalities because they eloquently address through vivid prose those lessons, those realities, and those truths we know from our own often painful experiences.  

Coulter, Limbaugh, Will, Buchanan, and others lead the charge in the conservative movement, fighting, defending, and educating, to protect those values birthed from the document which began, When in the course of Human Events

With flare they entertain us, they provoke us, and most gratifyingly they inflame those characters on our left who do venture to pervert the words from that exalted text to do harm to the venerated nation responsible for creating more wealth, more technology, more charity, more justice, and more freedom than any other.

Every now and then even these gifted minds can whack one out into left field, catching me off guard prompting me to rebut, Yo wait a minute, I beg to differ!

Painful lessons received as entrepreneur and manager of a small business remind me how fulfilling, but also how unforgiving America’s system of laissez-fair can be.   Experiencing the loss of a business due to overseas competition, it is quite tempting to hope for some government regulation to protect my small enterprise.   The question then becomes, at what cost?  

Free trade is always vilified by those unfortunate souls stung by competition’s relentless assault.   Our alternative, however, is that we must all pay to subsidize the protection availed one particular group.   Add subsidy on top of subsidy and we become a people dependent and desperate to government to solve our problems.

Most economists agree with the sentiments shared by Alan Greenspan in his book The Age of Turbulence:

To the extent that governments protect portions of their populations from what they perceive as harsh competitive pressures, they achieve a lower overall material standard of living for their people.”  

Government regulation, subsidy, and protection always will benefit one particular group; those benefits charged off to the rest of us.  

In recent writings, Pat Buchanan recalls American protectionist policy and laments the migration of manufacturing jobs to Mexico.   He makes compelling arguments for protection measures highlighting a history of protectionist tariff and suggests our strength is wedded to those policies.
I would propose America is great in spite of those policies.   Dedication to free markets and individual freedoms is so potent even poor protectionist policy cannot kill our good fortune.

Why should we pay a worker in Detroit twenty-five bucks an hour with health benefits to bolt a wheel on a car when a kid in Mexico is willing to do it for three bucks?   Why is Toyota the biggest manufacturer of automobiles in the world today having surpassed General Motors?   Why did Unions negotiate and manufacturer’s managers except labor contracts that would cause American vehicle costs to be fifteen-hundred to two thousand dollars more than foreign competitors?   Why were retirement programs funded by future and unpredictable sales?   Why are American autoworkers surprised they are losing their jobs?  

Our global economy is not going to stop doing business because the United States introduces tariffs to try and save American jobs.   With the internet, global product development can take place without even leaving your desk.   I can hire someone in India to design an electronic circuit where it is subsequently manufactured in Malaysia, then shipped to China where an enclosure is molded and the product is assembled and packaged.

When the whole world uses these varied resources to produce their goods and services, we cannot expect to compete by guaranteeing American workers low-tech jobs.   We have the resources to train and offer our people higher technology jobs when many other parts of the world cannot.   How can we stop the relentless competition they will offer because they have no other choice?

Not only does protectionist policy insulate companies and encourage bad decisions by management, it drugs labor into a false sense of security and promotes an entitlement mentality contrary and in negative tension with management.  

Study of the American auto industry shows a spiteful and distrusting relationship between labor and management.   Contrast this to the Japanese model where labor is intimately involved with management and dedicated to the same goals as management.

If American auto workers and managers want to fight with each other, so be it, but do we want government mandating that we pay for the negative consequences resulting from that fight?  

Protectionism is a superficial band-aid covering up bad government policy which caused work to move overseas to begin with.   It’s not just labor costs which drive jobs overseas, American manufacturers must contend with some reasonable but some draconian regulations from OSHA and EPA, confiscatory taxes, hostile political rhetoric, insurance costs, and worst of all, a work force that does not view its jobs as privilege which must be fought for to maintain, but a right to which it is entitled.

Chinese competition killed my tool making business and it forced me to redirect my efforts.   Today my plastic processing business does better than my tooling business ever did.   I adapted and took advantage of America’s innate culture of opportunity to succeed.   Do we want to pay fellow Americans arbitrarily high wages when they cannot or will not make similar adjustments?

According to Alan Greenspan, this will reduce the quality of life for all of us.

Pat Buchanan is right about an awful lot and I am enthusiastically informed each time I read his words.   Concerning free trade however, strong intellect, knowledge of history and analytical skills may not provide all that is required to understand totally the many and varied interactions that direct experience intuitively might.   Free trade allows the aggregate society that embraces it to benefit wholly.   Protectionism benefits only those targets within a legislation’s net; those outside that net subsidize it.

I have ferociously fought the free-trade forces which have endeavored to put me out of business and would benefit nicely from some legislator’s net.  

I welcome the policy initiatives any politician wants to construct for my advantage.  

Who wants to pay for it?

 

Copyright 2008 Jim Pontillo

21 thoughts on “No No NAFTA?

  1. So we’re all for free trade right? Open borders yeah with free movement of goods, services, capital and labour?

    Then surely America should completely open its borders to all immigrants whether they come illegally or not? They boost the workforce, give middle class people cheap labour and increase the productive potential of the economy in general. Y’all with me?

  2. I guess I can see both sides of your editorial. While I do agree that competition breeds excellence, I also feel that there are quite a number of Americans that have aged to the point where learning and adapting to new skills is way beyond them. I work with a bunch of “screw shooters” and it would take them an inordinate amount of time to become proficient with new skills.
    On the same level, I am a tool maker myself and can feel the impact that China is making in this field very well. Again, I think competition can breed excellence, but what if your job evaporates. I COULD learn to work with plastics, but what happens when China overtakes that field as well?
    I do not want to look back on my life and see that I was staying just one step ahead of the NAFTA curve my whole life. So, what do you suggest I do?
    Those “tire installers” making 25 an hour, yeah, that’s high. But nobody was complaining how much they got paid until corporate downsizing and NAFTA occurred. Every person that is in the working class today is now a victim of the sorry economic situation facing this country. The cost of living has yet to go down but so many business owners cannot or will not pay what it takes to enable a person to rise above the median income level.
    I think that some form of protectionist strategy is exactly what we need in this country. All of these foreign countries are all too happy to sell their stuff to us, but they balk at buying our goods because of the inflationary difference in our monetary funds. They can also make in their country what we would like to sell them (except for complex defense systems).
    So, I have to disagree with you on these issues. Charity starts at home. Our people are hurting. Looking at it through partisan lenses doesn’t change the fact that the USA is in trouble.

  3. I’m retired. I don’t believe that a person cannot learn a new trade at any age. It keeps the mind active and promotes longevity.

    We need to stop buying so many products from China, they are poisoning our economy, double entendre.

    Carol

  4. 03/27/08 FOR MISTER McCAIN & COMPANY:
    >Try building your campaign & surviving a lifetime
    upon Right-To-Work wages. >Live the Pink-Collar-
    Blues! >Experience The Big Chill! Of towns decimated-by NAFTA–all along The I-85 Corridor
    >Feel The Thrill Is Gone! Hear the silence: from mothballed plants of textiles gone-to dust & lint.
    >We’ve been naFta’d ! Emphasis on The “F”.
    >How can The Globalists be called AMERICANS?!

  5. Anybody remember the American steel industry? You don’t? That’s because it went under. Why? Because janitors were getting $45 an hour to sweep floors in 1982. (I was told this salary by a janitor who was whining about being layed off and wondering how he was going to make that kind of wages doing anything else). When foreign steel was coming in more cheaply, did the unions work with management to lower costs and be competitive? No. The management could not recapitalize or modernize because of both bad management AND high production/overhead costs compared to foreign competitors. When the unions and labor force was told they had to take some cuts in order to keep competitive, they called it lies and propaganda.

    Today, the great Bethlehem Steel Corp is condos and gambling casinos. And the proud steel workers are no more – largely due to their own intractibility and greed.

    I believe we should CLOSE the borders for lots of reasons. That won’t do it alone, though. They will either flood in here to take our jobs at half the wages, OR the corps will close and send the mfg overseas where the cheap labor is.

    We have an American dream. That dream is that anybody can become president or drive a porsche if they have the talent, intelligence, and drive to do so. That dream has been perverted to mean that janitors demand wages such that they can ALL drive porsches, live in big houses, and have five weeks of vacation. Wherever unions are, that is. The rest of us have to deal with getting payed what our contribution rates and the market bears.

  6. The economy moves on. A lot of you are the same kind of people who would complain about the shrinking agriculture industry in the 1800s.

  7. I think that we are on the other side of the extreme of the effects of nafta. Before nafta we were not challanged so there was no need to innovate to cut costs. business could set its price with only competition inside the country at the same basic labor and energy costs. everybody could get a piece of the pie. as nafta started you saw the basics start to get cheeper w/ lacking quality, china mold bases were a start, wow a mold base at half the price o.k so its rough around the edges I can work with that. top mold makers said no way, nat or dme only. as time gos on those mold bases start driving down the cost of materials and better profit. great, then if we can build mold bases there why not easier molds too… o.k china is getting smarter now 15 years later how many moldmaking shops and mold makers are left in the u.s. We need to balance this trade not close it off, that would be a big problem as we are far to dependent on china now. I suggest offering tax breaks for 100% american made goods to the companies that sell them and produce them as well. also the consumer should take some responciblilty as well. My wife knows look at lables and see where its made, try to find something here as hard as it is you are doing yourself a favor by buying goods made in the u.s.a.

  8. What the HELL is Pink Collar Blues talking about? Can someone please translate?

  9. But taxing foreign goods and giving tax redemption for American goods is a form of subsidy and goes against free trade.

  10. Has anyone thought about our ridiculous overbearing tax code and how that is contributing to the exodus of jobs and capital? Our corporations and high wage earners are PUNISHED for doing well. Hell I would move my operations off shore too if I could. Take a look at Ireland and how they are not attracting capital, investment and companies because they have a sensible tax code.

    You cannot continue to steal from people and not expect them to leave if they have the opportunity.

  11. It’s better for America to transition to a service and technology economy with a developed welfare system than it is to struggle to compete with countries that routinely abuse human rights.

  12. I read the reply regarding Bethlehem Steel and their disappearance. While I do agree that wages should be competitive for the level of skill required to earn them, I can also attest that allowing a company to cut and sacrifice still leads to one place, another country. I currently work for Whirlpool Corporation in La Vergne, TN. I’ve been there for 10 years and ever since I got there, they have been talking about closing down.
    So the Union negotiated with them and froze wages for 3 years, combined jobs to eliminate some people, cut even more people from skilled trades (making proper maintenance on the dies damn near impossible), and laid others off indefinitely.
    Then, after all those sacrifices, we were told that they are moving our plant to Ft. Smith, Arkansas and that plant is moving to Mexico. My pay is not any higher than any other Tool and Die job that an experienced guy can get. It’s just that Whirlpool is leaving America altogether as soon as they can.
    The thing that really gets me is they want us to do all kinds of special work on machines and dies so the new folks don’t have to. It’s not gonna happen! Where is our incentive to make our overtakers jobs easier?
    I guess what I am saying is this. None of this would have happened without NAFTA. NAFTA was the first step in building a one world economy (bank) and a one world government (Thanks Bill Clinton!!). This goes way deeper than the loss of Bethlehem Steel. In the end, the small amount of profit made from trading with China won’t be enough to offset the terrible cost to future generations. But who the hell cares about them anyway, RIGHT?
    Remember Jesus’ words: As you do unto the least of these, you do also unto me.
    Wake UP! We are literally selling our country to foreign buyers and our sovereignty is quickly fading. Your leaders are all to blame for this fiasco. Democrat AND Republican alike, they are all criminals. They are using your personal values to coerce you to vote for them.

  13. what is a “developed welfare system”???? It seems to me that our system is way to developed now.

  14. I just think that liberals are trying to kill the old fashioned america that we should be living in right now.

    TV is a perfect example…

    Back in the day, you had happy and pleasant shows like ‘Leave it to beaver,’ the kind of shows that symbolized how America was a happy and proud country. Now you have these shows that make our country look unorganized and trashy. ‘Cops’ is probably the only reality show out there, which scares me. It shows what kind of people we have in our society.

    Were there any Trailer Trash Heroine addicts in ‘Leave it to Beaver’ Days?

  15. The 1950’s were the perfect time, ah yes, we didn’t have any crime in those days, or racial issues, nay, there was ne’er a head unhatt’d or man unemploy’d; ’twas truly the best of times, the golden age of man!

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