Free trade - oy and vey...

there's been a discussion/debate on free trade underway at tpm cafe's book club... i confess to some frustration over that particular venue (tpm cafe) because my reaction to much of what goes on there is that it's a great deal of intellectual masturbation, credential-flaunting, and battles among varying schools of thought somewhat akin to gryffindor and slytherin at hogwarts... i am, however, interested in the topic of trade and its global consequences... the post by alan blinder, an economics professor at princeton, prompted me to engage in my own form of intellectual self-abuse...

here's how blinder's post kicked off...

"Liberals" seem [to] have been renamed "progressives" these days, but for some reason they still seem to be hostile to freer trade--although Gene Sperling is a refreshing exception. As a liberal/progressive economist, this hostility to trade has long pained me. Frankly, I don't see anything "progressive" about protectionism.

and here's my unusually long-winded response...

i can only speak for myself... i don't pretend to carry the intellectual heft or credentials of many of the posters here and, for that, i'm glad, quite honestly...

i am certainly not against trade nor do i disagree with many of your points... but i do see a dilemma and i have seen that dilemma playing out for quite some time... the examples i will cite are those gathered through observation and experience, not dialogue and policy debate... again, these are from observation and experience...

i have watched nafta transform the face of mexico and not in a good way... when i saw that a walmart and sams club had opened in navajoa, a medium-sized city on mexico's west coast which 25 years before had mostly dirt streets and mom and pop shops, i knew that significant changes had occurred... and it's not just the walmarts... it's home depot, it's officemax, and it's costco... what are those changes...?

well, for one, there's the usual spate of business closures due to the big box competition... what's more interesting, though, is the fact that those big box outlets are essentially charging u.s. prices for their goods which means that the vast majority of folks can't afford to shop there... however, the upper end across the country now has convenient access to all of the goodies they previously had to obtain in either the u.s. or mexico city... even more interesting is that those outlets are paying their help mexican wages... what does this mean...?

what it means is that nafta has done nothing to ameliorate the yawning gap between the rich and the poor of mexico and, in fact, has served to increase it... the carlos slims of mexico, who already owned most of the assets that the big boxes required, have been able to latch on to a lot of that investment and, as a result, have added significant wealth to their already mind-boggling riches and are now in the process of expanding their empires well beyond mexico's borders (examples: telmex, bimbo, cemex)...

u.s. cargo trailers being pulled by mexican tractors are omnipresent on mexican highways... they're literally everywhere, right on down south past mexico city... i make it a point to try to spot mexican cargo trailers in the u.s... there used to be none... now there are nearly none... all the mexican products proliferating in the u.s. stores these days come across the border in u.s. trailers that would otherwise be deadheading home... while this may be good for some u.s. and mexican trucking companies, we all know what truck drivers get paid and what the over-the-road trucker's life is like... if you don't, i'll tell you... they're both shit...

what has trade meant for macedonia, formerly part of yugoslavia, a country where i have spent some time...? quite simply, the local producers are getting killed... every product on the shelf, no matter what unfamiliar brand name it might have, when you read the fine print on the label, reads proctor and gamble, unilever, biersdorf, nestle, etc... for clothing, if it isn't an internationally recognized brand (nike, quicksilver, adidas, reebok, tommy hilfiger, etc.) or an acceptable knock-off, people won't buy it... the domestic textile, food and consumer products industries are desperately trying to find competitive niche markets but, so far, have not been very successful...

what has trade meant for the u.s...? it's very simple and very plain to see... the middle class is being exterminated... employers can't afford their pension programs, their union contracts, their benefits programs, their wage scales, or the numbers of employees in their workforce... none of those items, for various reasons, are competitive on the world market... the poor of other countries are not being raised up, the workers of the u.s. are being pushed down... the companies that are tied up with union contracts and huge financial obligations to their employees are adopting bankruptcy as a strategy to shed them... industries that have no such obligations are simply doing it and employees have no recourse... skilled construction tradesmen where i live, a right-to-work state, are earning $8 an hour...

no, i'm not against trade... yes, i consider myself both a liberal and a progressive... but what i would suggest, gentlemen and women, is that you climb out of the towers of your rhetoric and policy debates, take a walk around the highways and byways of the world's grassroots, and then propose some workable way we can all move forward and can all win... right now, we're working on a lose-lose proposition - unless, of course, you're a big capital holder...

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