Globalist CEOs Oppose Trump and Sanders
In my Republican / Libertarian days I believed the standard position - Free Trade is what made America Great. And tariffs, such as the disastrous Smoot-Hawley act, lead to economic restriction and depression. I considered this position to be axiomatic and not worth much thought.
In 2008 my life changed after I took the Red Pill. This was the start of my journey in reevaluating all my political, economic, sexual and religious beliefs. I discovered that many of my cherished beliefs were based on myths.
Free Trade was once such belief that was shattered. It is a myth that America was founded upon Free Trade. Tariffs were common in the 18th and 19th centuries to protect American industries. During this time America expanded as a major economic power.
It is also a myth that trade restrictions had anything to do with the Great Depression of the 1930s. The Stock Market crash of 1929 was based on a speculation bubble that crashed. There is no evidence that trade was the cause of a general economic downturn. Certainly it was not the Smoot-Hawley act that impacted only 1.3% of the economy.
It should also be noted that while America and England were suffering during the Depression, Germany was booming economically. And Germany was a nationalist state that protected their industries. So if tariffs are bad, why did they work for Germany during that time?
The only thing that pulled the USA out of the Depression was WW2. And the economy boomed during the 1950s and 1960s as the rest of the world was rebuilding from the war or under communism. Free Trade worked in our advantage as we had no competition.
But as business has globalized, this has allowed for the labor pool to span across the world. This huge increase in the supply of labor has reduced real incomes and resulted in the loss of jobs in America and Britain. Our current Free Trade agreements have been a disaster for the average American.
Free Trade is great if you have a guaranteed job or if you don't need to sell your labor. You get the advantage of cheaper trinkets. However, it is a disaster for everyone else.
http://www.wsj.com/articles/campaigns-populist-tone-rankles-americas-ceos-1461542822
http://buchanan.org/blog/the-isolationist-myth-165
http://www.huffingtonpost.com/ian-fletcher/protectionism-didnt-cause_b_527274.html
What Red Pilled you in 2008?
ReplyDeleteI have an explanation for the causes of the Great Depression in 2 points.
ReplyDelete1) I cite from Send In The Waco Killers by Vin Suprynowicz
"Hoover burned the White House midnight oil ... actively cajoling, blackmailing .. American Industry into keeping wages high, which could have no effect but to throw everyone out of work ...
Hoover with the 'best intentions' just managed to extend what could have been a minor economic correction into a major [national] depression ..", p 11
Point 2 is to ask where the minor economic correction comes from.
2) After America had become Independent, it had created an economy based on immigration. America created a society of whites of different migratory history where the descendants of the early settlers were on the top and new arrivals were on the bottom. You were more American the longer your ancestors had lived in America or the longer yourself had lived in America.
The true Americans got the good jobs that where overpaid while the new arrivals from Europe had to take bad jobs that were underpaid. It paid for the Europeans to take these jobs since they knew they would automatically climb up the ladder, and their children and grandchildren would have it better, their grandchildren being the first generation to profit from the system.
5 years after arrival you were ready to be naturalized and then you would climb up the ladder one step.
The Quota Acts reduced immigration. Quota Act I of 1921 not really, the numbers proved to be not strict enough. That's why the act was corrected by Quota Act II in 1924. QAII effectively blocked immigration. 5 years later when everyone who had immigrated before QAII was enacted was ready to be naturalized, the basis of the economy broke away, the masses of immigrants who worked in underpaid jobs at the lowest level had disappeared. Thus the economy needed correction. Wages would have fallen a little if Hoover had allowed.
Is the new $15.00 minimum wage that is now the law in places like California protectionism for their burger flippers? Just wondering.
ReplyDeleteIt's economic thermodynamics, the free-trader recipe for banking a cake - mix 2 eggs, 1 cup of flower, 1 cup sugar, open oven door and allow the ENTIRE HOUSE to heat up to 350 degrees, bake for one hour.
ReplyDeleteI used to work in the electronics industry and my duties included analyzing new designs by our company, and competing products to price out what it cost to manufacture them. iPhones made in the US would not cost $2,000. They would cost about 25% more than they do now, or alternatively, Apple would not be pocketing enormous margins. Stuff gets offshored because:
ReplyDelete1. If a technology product only makes a profit margin of let's say "only" 15%, management will fly in, have the product manager nailed to the cafeteria wall by their hands and feet, open up their abdomen so their guts spill out on the floor and march the other employees past as an example to the survivors.
2. Making circuit boards and other components is not an environmentally clean process. The company would rather have it done in China where no one cares about the ground water and the government will leave you alone as long as the top PLA officials are on the board of directors of the contract manufacturer and collecting their cut to buy their mansions in California.
3. Moving production overseas reduces the head-ache of dealing with all the hassles that are enabled by modern US institutions: workers comp claims and lawsuits, diversity sensitivity training, lawsuits by members of under-represented minorities, union extortion, SJWs picketing your place because you don't have unisex bathrooms or you are putting carbon dioxide into the air or endangering the Great White Northern Squirrel with your planned expansion, actually paying taxes on your huge profit margins etc.
#Ramzpaul - love your stuff and I agree that the Smmot-Hawley has been blow WAY out of propartion and needs to be put in its proper (much lower) place. I have not solved this issue but did make a small note on it here after an "hair-on-fire" article appeared in The Economist years ago.
ReplyDeletehttp://personalqwest.blogspot.ca/2008/12/smoot-hawley-revisited.html