ECONOMY - Nothing Free About "Free Trade"

"Lou Dobbs testifies before Congress on free trade" CNN

Although I normally have issues with Lou Dobbs' views, his points in this article are food for thought.

"The United States has sustained 31 consecutive years of trade deficits, and those deficits have reached successively higher records in each of the past five years. The trade deficit has more than doubled since President George W. Bush took office. The U.S. trade deficit has been a drag on our economic growth in 18 of the 24 quarters of George W. Bush's presidency.

....free trade has been the most expensive trade policy this nation has ever pursued. There is nothing free about ever-larger trade deficits, mounting trade debts and the loss of millions of good-paying American jobs.

Since the beginning of this new century, the United States has lost more than three million manufacturing jobs. Three million more jobs have been lost to cheap overseas labor markets as corporate America campaigns relentlessly for "higher productivity, "efficiency," and "competitiveness," all of which have been revealed to be nothing more than code words for the cheapest possible labor in the world.

Corporate America and our country's political elites have combined to put this country's middle-class working men and women into direct competition with the world's cheapest labor. Salaries and wages now represent the lowest share of our national income than any time since 1929. Corporate profits have the largest share of our national income than at any time since 1950.

The pursuit of so-called free trade has resulted in the opening of the world's richest consumer market to foreign competitors without negotiating a reciprocal opening of world markets for U.S. goods and services. That isn't free trade by any definition....

More than six years ago, the Board of Governors of the Federal Reserve System had this to say about what happens when trade deficits exceed 5 percent of GDP: "We find that a typical current account reversal begins when the current account deficit is about 5 percent of GDP." Again, our current account deficit now represents 6.5 percent of GDP. The authors of the study go on to say: "In general, these episodes involve a declining net international investment position that levels off, but does not reverse, a few years after the current account begins its recovery."

It is important to note that no recovery is underway, and that most importantly, the United States last year suffered negative investment flows. The cumulative effect of more than three decades of trade deficits and mounting external debt has produced our first investment income deficit on record. This is the first time that Americans have earned less on investments abroad than foreigners earned on their investments in the United States since 1946, when the Commerce Department began keeping records.

The upshot of present policy is corporations are getting richer, American jobs are out-sourced overseas (aka not here in America for American workers), and American workers are getting poorer. Corporate profits do not "trickle down" al la Reagan Fantasy-Land.