'Stop Calling Cronyism Protectionism'
We can see capitalism working in our communities so let's look at these terms locally before showing how distorted global Wall Street has made our US economy---DELIBERATELY. When immigrants come to America they usually congregate into community helping one another build business, find housing, gain wealth. It is not a coincidence that a China Town has almost nothing but Chinese businesses----small businesses, regional businesses. Today black citizens are saying they need to press for more concentration of black businesses in black communities helping each other find housing, gain wealth. Both cases are setting the stage for PROTECTIONISM.
White communities are not exclusive but have that same concentration. These communities open to others because white citizens have that stability and economic strength and can be less PROTECTIONIST.
PROTECTIONISM is vital in maintaining a local, core economy no matter the socioeconomic measure. Where the US has always had global markets it was after FDR and the Great Depression that empire-building laissez-faire started gaining steam. If your goal is to create MONOPOLIES as Wall Street and right wing pols moved forward then MONOPOLIES ARE PROTECTIONIST. Creating economic policy that kills a competitor and makes it impossible for small businesses to grow is PROTECTIONIST. Who pushed MONOPOLY? RIGHT WING REPUBLICANS----WHO ARE THE ONES ALWAYS SHOUTING AGAINST PROTECTIONISM? RIGHT WING REPUBLICANS.
The statement above STOP CALLING CRONYISM PROTECTIONISM is the response from citizens REALLY wanting a FREE MARKET economy in US. Once you allow MONOPOLY ----cronyism is right behind because wealth and power continue to grow.
While PROTECTIONISM does not harm in our local communities----CORPORATE MONOPOLY does harm free market. PATRONAGE ECONOMY comes as a result of too much wealth and power cronyism as in Baltimore City and PATRONAGE is an economic policy designed for cronyism and PROTECTIONISM of that 1%.
Below we see how US economy became crony and a monopoly-----CLINTON/BUSH/OBAMA and empire-building global market policies like NAFTA. The right wing always paints LABOR as being the one to hate NAFTA but anyone wanting free market and a healthy local economy would hate NAFTA.
'CHACE: Jobs like Bertha's, he says, were leaving the United States. Because of this rule, they went to Mexico and Central America rather than China. And also because of this rule, places like Parkdale had built-in customers. The U.S. textile negotiator on NAFTA, Ron Sorini, he says that without this rule, you'd have no NAFTA, because senators in the textile-making South would not have let it through Congress.
RON SORINI: If we had not committed to negotiate a yarn-forward rule of origin, we wouldn't have gotten NAFTA, and we wouldn't have had the World Trade Organization'.
And all the offshoring of US corporations and jobs was tied to PROTECTIONISM---
The Secret Protectionism Buried Inside NAFTA
December 26, 20134:02 AM ET
Heard on Morning EditionZoe Chace
The Secret Protectionism Buried Inside NAFTA
In order to get the North American Free Trade Agreement signed 20 years ago, a specific trade-off was made. The trade-off would not protect U.S. jobs from moving overseas.
DAVID GREENE, HOST:
Now NPR's Zoe Chace, from our Planet Money Team, reminds us about one industry that played a big role in NAFTA's passage: men's underwear.
ZOE CHACE, BYLINE: Now you're used to the labels: made in Mexico, made in China, made in Bangladesh. But back in the '80s, when they were first talking about NAFTA, about half of American clothing was made in America, by people like this.
BERTHA MARR: Graduated from the eighth grade, then went straight on in to working at Fruit of the Loom.
CHACE: Bertha Marr sewed Fruit of the Loom's most popular product: men's boxer briefs.
MARR: I did one thing.
CHACE: What was it?
MARR: It was that little - well, I'm afraid to say it on the phone.
MARR: It was that little flap that goes right up the front of it.
CHACE: It was a good job, sewing the fly of men's underwear. Bertha said she made about $100 a day. And the big fear was, when it came to NAFTA, that good manufacturing jobs like Bertha's would leave the United States and go to Mexico. Presidential candidate Ross Perot characterized the fear most memorably in a 1992 debate.
(SOUNDBITE OF DEBATE)
ROSS PEROT: Pretty simple: If you're paying 12, $13, $14 an hour for factory workers and you can move your factory south of the border, pay $1 an hour for labor, there will be a job-sucking sound going south.
CHACE: And that's what happened to Bertha's job. Here's Fruit of the Loom's current president, Rick Medlin.
RICK MEDLIN: To be competitive, we had to move those high-labor-content jobs offshore.
CHACE: Specifically to Mexico and Central America.
MEDLIN: NAFTA was the start, and CAFTA came along later.
CHACE: The economic idea is this: Casualties like Bertha are for the greater good. Some people lose their jobs, but we sell more stuff to Mexico and Canada, which is good for business, and our clothes are cheaper overall. But in order to get this deal signed into law, there was a specific tradeoff that was made, a tradeoff that's sort of the opposite of what free trade is: a restriction that had everything to do with the men's boxer brief.
The restriction didn't save Bertha. It saved the people who did the step just before Bertha.
DAN NATION: We're the largest textile company in this hemisphere, we believe.
CHACE: This is Dan Nation, CEO at Parkdale, headquartered in North Carolina. What Parkdale does, is it takes cotton and spins it into yarn.
NATION: I think we may be the largest yarn spinner in the world. We're certainly one of the largest. You never quite know in China.
CHACE: Now, yarn looks to you and me like thread. The little lines you see in your cotton clothes, that's yarn. Yarn is what your underwear is made of, and yarn is at the center of this restriction that made NAFTA possible. The restriction is this: You can make men's boxer briefs in Mexico, send them here duty-free, but you can't use yarn made in China.
In order to get the duty-free deal, you have to use yarn produced in the NAFTA region. This is called the yarn-forward rule of origin. It means everything in the underwear-making process. Yarn forward has to be done in the region. Again, Rick Medlin, the president of Fruit of the Loom.
MEDLIN: The real caveat that has allowed us to be competitive with Asia is the yarn forward rule.
CHACE: Jobs like Bertha's, he says, were leaving the United States. Because of this rule, they went to Mexico and Central America rather than China. And also because of this rule, places like Parkdale had built-in customers. The U.S. textile negotiator on NAFTA, Ron Sorini, he says that without this rule, you'd have no NAFTA, because senators in the textile-making South would not have let it through Congress.
RON SORINI: If we had not committed to negotiate a yarn-forward rule of origin, we wouldn't have gotten NAFTA, and we wouldn't have had the World Trade Organization.
CHACE: Yarn forward became the price of admission to get U.S. free trade deals done. The irony here is that despite the whole purpose of the free trade deal to have importers bring in clothes for free as long as they do this one thing, it turns out it's a lot of paperwork. So lots of importers say, I'm just going to bring it in from China and pay the duty. Despite NAFTA, China is the number one supplier of clothes to the United States. Zoe Chace, NPR News.
Trump comes to office after these few decades of PROTECTIONISM in US caused by ignoring US anti-monopoly laws and killing our free market US economy and is now a right wing Wall Street pol shouting against PROTECTIONISM. Make no mistake----having US Foreign Economic Zone policies that only allow EXPORT MANUFACTURING is PROTECTIONISM.
When the global 1% want to grow their market share they define PROTECTIONISM differently than WE THE PEOPLE. This is why we know Trump and our global Wall STreet Clinton/Obama neo-liberals are up to KNOW GOOD FOR THE 99% of citizens.
Trump is POSING RIGHT CONSERVATIVE in shouting FOR PROTECTIONISM and he will in no way stop TRANS PACIFIC TRADE PACT moving massive global corporate campuses to MONOPOLIZE our US city economies.
TPP IS PROTECTIONISM FOR GLOBAL CORPORATIONS.
Why Attacking Free Trade Is Great Politics and Bad Economics
Jan 23, 2017
If Donald Trump cracks down on trade, he will not be the first politician to fly in the face of economic wisdom, only the loudest. As Dani Rodrik of Harvard said famously, on no other issue do politicians and economists disagree so much as they do on trade.
You can expect to see a lot of that disagreement in the news this week. On Sunday, Trump announced his intentions to begin renegotiating the North American Free Trade Agreement as soon as possible. He may also issue an order announcing the U.S.'s withdrawal from the Trans-Pacific Partnership.
He is not, as we've said, the first politician to defy the logic of free trade. But now we have evidence that politicians do not really believe in protectionism. They only act as if they do.
The evidence emerges from two studies of American politics conducted by a group of Italian economists. The first, published in 2014, examined the timing of protectionist (that is, anti-free trade) votes by U.S. senators. The second, hot off the press, looked at the timing of trade disputes launched by U.S. Presidents.
The studies, which appeared in the Journal of International Economics reached a similar conclusion. To generalize: American politicians care very much about restricting trade as they approach re-election, and care very little about it at other times.
It has long been known that America’s Senate is less protectionist (i.e., more likely to favor trade deals) than the House. The usual explanation was that senators, representing larger territories, took a broader view.
But Paola Conconi, Giovanni Facchini and Maurizio Zanardi discovered that only certain U.S. senators were less protectionist. Which senators? Precisely those basking in the relative comfort of the first four years of their terms.
“Policymakers’ Horizon and Trade Reforms:
The Protectionist Effect of Elections,” examined 29 final roll-call votes on trade liberalization between 1973 and 2005, involving a total of 267 senators. It revealed that senators serving out the final two years of their terms were significantly more protectionist. In other words, once a senator’s political longevity was reduced to that of a House member, he or she started voting like a House member.
There were only two classes of senators who did not become more protectionist: those who had announced a decision to retire, and those holding ultra-safe seats. “Close to election, the incumbent politicians manipulate regular government decisions,” the authors concluded. Indeed, various senators who voted pro-trade on some occasions never supported trade liberalization during their last two years.
Does the premise of vote-seeking trade hawks hold true for the executive branch? Hillary Clinton’s switcheroo on the Trans-Pacific Partnership, which she vigorously endorsed as Secretary of State and vigorously denounced when campaigning for President, suggests that it does.
Five economists (including two of the authors from the earlier study) have now put meat on the bones. Remember when Barack Obama, while on a campaign swing through Ohio, which is home to many auto parts makers, initiated a trade dispute at the World Trade Organization alleging that China was unfairly subsidizing automobile-part exports? That was filed less than two months before Election Day, 2012. George W. Bush filed a similar dispute against the European Union in 2004, alleging that the EU unfairly subsidized Airbus (a competitor of Boeing), just a month before Election Day.
Were these sudden conversions to protectionism, respectively 44 and 45 months into Presidential terms, a coincidence? Assuredly not, according to the evidence presented in the second study, the pointedly titled “Suspiciously Timed Trade Disputes.” As the authors elaborate, “Our results confirm that U.S. presidents are more likely to initiate WTO disputes during the last year of their first term”—and that such disputes disproportionately involve politically sensitive industries in states that are up for grabs. They did not find any pattern during Presidents’ second terms, when they no longer faced reelection.
Trump, who has the swing states Ohio and Michigan, among others, to thank for winning the election, took office amid a blur of threats to clamp down on trade via tariffs of as much as 45% on China and 35% on Mexico, and via social-media bullying (witness his tweets against the auto industry and Carrier). Economists, with surprising near-unanimity, believe that either approach would damage America’s economy.
In brief, protection restricts consumer choice, raises prices (for all), dubiously involves the government in picking economic winners and losers, and shelters inefficient firms. It will boost the rate of inflation—the sleeper economic issue, it will be seen, of the Trump tenure—and ultimately depress U.S. exports by triggering retaliatory tariffs from our onetime friends. Policies that lead to a depression in Mexico or China (the U.S.’s second- and third-biggest export market, respectively) will hardly be good news in Akron or Flint. An extreme protectionist policy could even provoke a world-wide recession. In the long term, trade nurtures peace, tariffs excite international suspicions and bellicosity.
Pollsters say protectionism is good politics because the few people whose jobs may be affected care very much, whereas the scores of millions whose standard of living is improved by trade are not particularly aware of it. This misbegotten argument for restricting trade would similarly argue for curtailing Amazon, Walmart, or Uber. The benefits of lower prices and enhanced consumer choice that innovative companies have delivered to millions of consumers have, for sure, hurt employees in selected industries. That’s the tradeoff for progress in a capitalist society.
In reality, protecting America from China makes no more sense than protecting Ohio from Indiana, or protecting Barnes & Noble from Silicon Valley, or protecting any industry from the lower costs delivered through greater efficiencies, including through automation. It’s understandable that voters are slow to grasp the fact. The benefits of trade are dispersed and appreciable only over time. They also are significant. Imagine how depressed the citizens of Ohio, or of any state, would become in 20 years if its citizens could buy only products manufactured in-state, and never trade with people in other states or other lands. Insulation would lead to isolation, depressing not only their economy but also their civilization.
But as we now know, thanks to the Italian studies politicians do grasp these facts. They or the more honest among them recognize that trade barriers are a patent medicine for the masses, a god that has failed. Will Trump and the protectionist bloc in Congress put the squeeze on trade all the same? There is a word that describes politicians pushing popular (in the short run) policies that they know to be harmful to their constituents. It is called demagoguery.
Yes, America was founded on a revolution against MONOPOLY AND PROTECTIONISM. Wait-----it was a revolution FOR PROTECTIONISM.
Again, we must look broadly to understand from where an article is coming. The colonial EAST INDIA CORPORATION tied to the England 1% had indeed a monopoly and was protected against competition both from colonists building local industry AND from other nations bringing products.
THIS WAS MONOPOLY AND PROTECTIONISM AND THIS IS EXACTLY TO WHERE MOVING FORWARD US CITIES DEEMED FOREIGN ECONOMIC ZONE POLICIES TAKE THE US AGAIN.
So, a GLOBAL CORPORATE TRIBUNAL OF THE GLOBAL 1% created policies saying EAST INDIA CORPORATION could be a monopoly and protectionism was fine just as Trans Pacific Trade Pact does today.
Meanwhile, LOCALLY in America's communities the 99% of citizens were shouting FOR PROTECTIONISM from that pesky global corporation killing any ability of American small business growth. America passed laws protecting the US economy against MONOPOLIES AND GLOBAL CORPORATIONS by installing PROTECTIONIST POLICIES.
'Thus the American Revolution was to some extent a war over industrial policy, in which the commercial elite of the Colonies revolted against being forced into an inferior role in the emerging Atlantic economy. This is one of the things that gave the American Revolution its exceptionally bourgeois character as revolutions go, with bewigged Founding Fathers rather than the usual unshaven revolutionary mobs'.
The same OLD WORLD MERCHANTS OF VENICE and KINGS AND QUEENS tied to secret societies are behind CLINTON/BUSH/OBAMA pushing the US back to colonial economics. WE THE PEOPLE the 99% must think from what perspective these public policy discussions come----the far-right wing global Wall Street CLINTON/BUSH/OBAMA are only coming from a right wing extreme wealth extreme poverty so these terms are the opposite to what is good for the 99%. This happens because Democratic voters allow a far-right wing Clinton neo-liberalism capture our people's left social progressive party which is REALLY FREE MARKET AND PROTECTIONIST FOR AMERICAN BUSINESSES.
09/12/2010 12:25 am ET | Updated May 25, 2011 America Was Founded as a Protectionist Nation
By Ian Fletcher
Contemporary American politics is conducted in the shadow of historical myths that inform our present-day choices. Unfortunately, these myths sometimes lead us terribly astray. Case in point is the popular idea that America’s economic tradition has been economic liberty, laissez faire, and wide-open cowboy capitalism. This notion sounds obvious, and it fits the image of this country held by both the Right, which celebrates this tradition, and the Left, which bemoans it. And it seems to imply, among other things, that free trade is the American Way. Don’t Tread On Me or my right to import.
It is, in fact, very easy to construct an impressive-sounding defense of free trade as a form of economic liberty on the basis of this myth. Unfortunately, this myth is just that: a myth, not real history. The reality is that all four of the four presidents on Mount Rushmore were protectionists. (Even the pseudo-libertarian Jefferson came around after the War of 1812.) Historically, protectionism has been, in fact, the real American Way.
This pattern even predates American independence. During the colonial period, the British government tried to force its American colonies to become suppliers of raw materials to the nascent British industrial machine while denying them any manufacturing industry of their own. The colonies were, in fact, the single biggest victim of British trade policy, being under Britain’s direct political control, unlike its other trading partners. The British knew exactly what they were doing: they were happy to see America thrive, but only as a cog in their own industrial machine. As former Prime Minster William Pitt, otherwise a famous conciliator of American grievances and the namesake of Pittsburgh, once said in Parliament,
If the Americans should manufacture a lock of wool or a horse shoe, I would fill their ports with ships and their towns with troops.
Thus the American Revolution was to some extent a war over industrial policy, in which the commercial elite of the Colonies revolted against being forced into an inferior role in the emerging Atlantic economy. This is one of the things that gave the American Revolution its exceptionally bourgeois character as revolutions go, with bewigged Founding Fathers rather than the usual unshaven revolutionary mobs.
It is no accident that after Independence, a tariff was the very second bill signed by President Washington. It is also no accident that the Constitution — which notoriously does not authorize a great many things our government does today — explicitly does give Congress the authority “to regulate commerce with foreign nations.” (Article I, Section 8.) This fact drives flag-draped libertarians crazy, but there it is.
Protectionism’s first American theorist was Alexander Hamilton — the man on the $10 bill, the first Treasury Secretary, and America’s first technocrat. As aide-de-camp to General Washington during the Revolution, he had seen the U.S. nearly lose due to lack of capacity to manufacture weapons. (France rescued us with 80,000 muskets and other war materiel.) He worried that Britain’s lead in manufacturing would remain entrenched, condemning the United States to being a producer of agricultural products and raw materials.
In modern terms, a banana republic. As he put it in 1791:
The superiority antecedently enjoyed by nations who have preoccupied and perfected a branch of industry, constitutes a more formidable obstacle than either of those which have been mentioned, to the introduction of the same branch into a country in which it did not before exist. To maintain, between the recent establishments of one country, and the long-matured establishments of another country, a competition upon equal terms, both as to quality and price, is, in most cases, impracticable. The disparity, in the one, or in the other, or in both, must necessarily be so considerable, as to forbid a successful rivalship, without the extraordinary aid and protection of government.
Hamilton’s policies came down to about a dozen key measures. In his own words:
1. “Protecting duties.” (Tariffs.)
2. “Prohibition of rival articles or duties equivalent to prohibitions.” (Outright import bans.)
3. “Prohibition of the exportation of the materials of manufactures.” (Export bans on raw materials needed for industrialization here at home.)
4. “Pecuniary bounties.” (Export subsidies, like those provided today by the Export-Import Bank and other programs.)
5. “Premiums.” (Subsidies for key innovations. Today, we would call them research and development tax credits.)
6. “The exemption of the materials of manufactures from duty.” (Import liberalization for industrial inputs, so some other country can be the raw materials exporter and we can industrialize.)
7. “Drawbacks of the duties which are imposed on the materials of manufactures.” (Same idea, by means of tax rebates.)
8. “The encouragement of new inventions and discoveries at home, .and of the introduction into the United States of such as may have been made in other countries; particularly those, which relate to machinery.” (Prizes for inventions and, more importantly, patents.)
9. “Judicious regulations for the inspection of manufactured commodities.” (Regulation of product standards, as the USDA and FDA do today.)
10. “The facilitating of pecuniary remittances from place to place.” (A sophisticated financial system.)
11. “The facilitating of the transportation of commodities.” (Good infrastructure.)
Hamilton set forth his case in his Report on Manufactures, submitted to Congress in 1791. Perhaps the most startling thing about his suggested policies is how modern they are: few people realize that the R&D tax credit was first proposed in 1791!
Due in large part to the domination of Congress by Southern planters, who favored free trade, Hamilton’s policies were not all adopted right away. It took the War of 1812, which created a surge of anti-British feeling, disrupted normal trade, and drastically increased the government’s need for revenue, to push America firmly into the protectionist camp. But when war broke out, Congress immediately doubled the tariff to an average of 25 percent. After the war, British manufacturers undertook one of the world’s first cases of predatory dumping, whose purpose was, in the words of one Member of Parliament, to “stifle in the cradle, those rising manufactures in the United States, which the war had forced into existence.” In reaction, the American industrial interests that had blossomed because of the tariff lobbied to keep it, and had it raised to 35 percent in 1816. The public approved, and by 1820, America’s average tariff was up to 40 percent.
Fast-forward a few years. Gloss over a number of important tariff-related political struggles, such as the South Carolina Nullification Crisis of 1832, one of the precursors of the Civil War, in which South Carolina tried to reject a federal tariff. There was a brief free trade episode starting in 1846, coinciding with the aforementioned zenith of classical liberalism in Europe, during which America’s tariffs were lowered. But this was followed by a series of recessions, ending in the Panic of 1857, which brought demands for a higher tariff so intense that President James Buchanan—the last free-trade president for two generations—gave in and signed one two days before Abraham Lincoln took office in 1861.
Lincoln, Teddy Roosevelt, and most of the other great names from American history were all protectionists. Protectionism was, in fact, Lincoln’s number two issue after slavery. As he put it in 1847,
Give us a protective tariff, and we will have the greatest nation on earth.
Revealingly, the only major exception to America’s protectionist consensus was the antebellum South, because free trade is the ideal policy for a nations that actually wants to be an agricultural slave state. An economy founded on slave-based agriculture has no hope of achieving competitive advantage in anything else, as slaves have proven unsuitable for industrialization since the time of Ancient Rome. Because the tariff was the main source of federal revenue in those pre-income tax days, the South also bore a disproportionate share of the nation’s tax burden. No wonder it was in favor of free trade—which the Confederate constitution eventually mandated.
Back when protectionism was American policy, it enjoyed a broad popular consensus. Only the left- and right-wing extremists of the day dissented. Extreme right wing Social Darwinists like William Graham Sumner—who published a fuming book in 1885 entitled Protectionism, the Ism That Teaches That Waste Makes Wealth—saw protectionism as a subsidy for the incompetent and an interference with the divine justice of the free market and the survival of the fittest. At the other extreme, Karl Marx, who was alive in those days and keenly watching American capitalism, wanted to see American capitalism break down and therefore favored free trade for its destructive potential.
Unfortunately for Marx, this was the golden age of American industry, when America’s economic performance surpassed the rest of the world by the greatest margin. It was the era in which the U.S. transformed itself from a promising mostly agricultural backwater, pupil at the knee of European industry, into the greatest economic power in the history of the world.
What happened to America’s long protectionist tradition? In the end, America only seriously turned away from protectionism as a Cold War gambit to prop up capitalist economies abroad and tie them to the U.S. Geopolitics trumped domestic economics.
Ironically, our old protectionist playbook for economic development is the same one, in many respects, that China and other nations are using against the United States today. Back when we were the ascending economic power in the late 19th century, it was Britain that complained about “unfair trade!” They were right, of course—but given that nobody forced free trade upon them, it was their own fault. Today, having forgotten our own history, we can’t even recognize the game being played against us, let alone figure out how to counter it. We will continue to pay a high price in lost jobs and declining industries until we wise up.
Trump and Republicans are at it again trying to confuse their right conservative Republican base shouting for PROTECTIONISM while working for global corporations and monopolies to take our US cities and economy.
Clinton global Wall Street neo-liberals are doing this as well. No one has worked harder to block the import of competitive PHARMA, TIMBER et al than CLINTON NEO-LIBERALS. They allowed the complete capture of our US economy to global corporations and monopolies, created the cronyism in our local city and state Democratic Committees, built the patronage non-economy structure all to assure no local US economy grew in US cities that were not global corporate campuses.
We posted that MERCATUS was that global Wall Street neo-liberal outlet writing this article. Why is all of the above OK with Mercatus but protectionism in imports from Canada not OK.
ONE WORLD ONE GOVERNANCE ONE GLOBAL CORPORATE TRIBUNAL REQUIRES ALL FOREIGN ECONOMIC ZONES AROUND THE WORLD HAVE THE SAME TRADE LAWS FOR GLOBAL CORPORATIONS.
So again we see PROTECTIONISM defined in a way that protects global corporations not our local US economies.
BOTH RIGHT WING REPUBLICAN AND LEFT DEMOCRAT ARE CAPTURED BY THAT SAME EAST INDIA GLOBAL CORPORATION AND GLOBAL 1% WANTING TO RETURN TO COLONIAL ECONOMIC POLICY.
'Stop Calling Cronyism Protectionism
Donald J. Boudreaux
Wednesday, May 10, 2017
Here’s a letter to the Wall Street Journal:
Uncle Sam’s scheme to punitively tax Americans who buy low-priced lumber from Canada is yet another instance of what is commonly called “protectionism.” The term, of course, refers to the protection from foreign competition that tariffs and other import restrictions bestow upon politically powerful domestic producers. Yet “protectionism” – with the sweet sound of the verb “to protect” – is far too kind and inaccurate a word for this policy'.
Institutes for Justice is that right wing public policy outlet silent on these few decades of MONOPOLY, CRONYISM, creating protectionism in our US cities for global corporations. Now they are on the PROTECTIONIST band wagon----we need to ask WHY? The answer is---MOVING FORWARD TRANS PACIFIC TRADE PACT which is hyper-protectionist for global corporations against our local economies.
We would read this thinking----THIS GROUP IS WORKING TO PROTECT WE THE PEOPLE---when they are actually working for those pesky GLOBAL EAST INDIA CORPORATION AND ROYALS.
Center for Judicial Engagement
| July 30, 2015
Assistant Director of the Center for Judicial EngagementCould the government prohibit LeBron James from playing professional basketball simply to put more money in the pockets of less talented athletes? Absolutely, said the Second Circuit Court of Appeals, in a surprising — and appalling — decision last week upholding a nakedly anticompetitive restriction on non-dentist teeth-whiteners in Connecticut. The decision deepens a split between the federal circuits concerning the constitutionality of economic protectionism — a split that cries out for resolution by the Supreme Court.
In 2011, the Connecticut Dental Commission issued a ruling that only licensed dentists were permitted to provide certain teeth‐whitening procedures. Non-dentist teeth-whiteners were threatened with up to $25,000 in fines and five years in jail per customer. Tasos Kariofyllis and Steve Barraco, co-owners of Sensational Smiles LLC, brought suit, arguing that this prohibition (like similar prohibitions in other states) does nothing to promote the state’s legitimate interests in public health and safety; instead, the prohibition is plainly designed to protect dentists from having to compete with cheaper, more convenient non-dentist teeth-whiteners. The parties agreed that only one rule applied to Sensational Smiles — a rule stating that only licensed dentists can shine an LED lamp at the mouth of a customer during a teeth-whitening procedure. These lights are no more powerful than a household flashlight and it is perfectly legal to make these lights available for customers to position in front of their own mouths.
Writing for himself and another judge on the Second Circuit panel, Senior Judge Guido Calabresi conceded that the would-be teeth-whiteners “forcefully argue[d] that the true purpose of the Commission’s LED restriction is to protect the monopoly on dental services enjoyed by licensed dentists.” However, he concluded that a “simple preference for dentists over teeth-whiteners” on the government’s part would be a “rational” justification, even if the challenged rule was neither meant to nor actually did anything to protect public health. “[E]ven if the only conceivable reason for the LED restriction was to shield licensed dentists from competition,” explained Calabresi, the rule would stand.
Judicial review of economic regulations is a sham under such an approach. As recited by Judge Calabresi, the default rule in constitutional cases–the so-called “rational basis test” — requires judges to determine whether there is a “rational relationship between… legislation and a legitimate legislative purpose.” The Supreme Court has made plain that legislative classifications must be supported by “legitimate” ends that are “independent” of mere political will to impose those classifications. The Court has consistently affirmed that Americans have a constitutional right to earn an honest living. Even in its most deferential rational basis cases, the Court has always required some assertion, however patently pretextual and insincere, of a public-spirited purpose for burdening the right to earn a living–some public-oriented end that is distinguishable from a bare desire to harm the politically powerless or benefit the politically powerful. As Judge Christopher Droney observed in his concurrence, to say that the court is inquiring into whether the government is pursuing a “legitimate” end is “disingenuous” if any reason — even one that is indistinguishable from pure political will — is sufficient.
Remarkably, this is not the first time that a federal court of appeals has endorsed naked economic protectionism as a constitutionally legitimate government interest. In Powers v. Harris (2004), the Tenth Circuit Court of Appeals concluded that a state could forbid non-funeral directors from selling caskets simply to give state-licensed funeral directors a lucrative monopoly on that trade. Judge Deanell Tacha quipped that “while baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments.”
By contrast, in St. Joseph Abbey v. Castille (2013) and Craigmiles v. Giles (2002), the Fifth and Sixth Circuit Courts of Appeal displayed the kind of judicial engagementrequired to ensure that any restrictions on the right to earn a living are justified by legitimate government ends. Both the Fifth and Sixth Circuits have rejected the notion that naked protectionism is constitutionally legitimate. Confronted with facts nearly identical to those in Powers — that is, state laws forbidding non-funeral directors from selling caskets–both courts engaged in impartial scrutiny of the evidentiary record to determine whether the licensing schemes at issue were justified by legitimate health or safety interests and concluded, correctly, that they were not. There is thus a “circuit split” prime for Supreme Court review, squarely presenting a question of fundamental importance to ordinary Americans across the nation–whether their right to earn an honest living can be extinguished by entrenched incumbents whose lobbying power they cannot match.
The answer to that question is a resounding “no.” The Second Circuit and Tenth Circuits’ endorsement of rent-seeking is flagrantly at odds with our Constitution’s basic premises. Founding-era jurists used the example of legislation that took from A and gave to B without any public-spirited justification as a paradigmatic example of illegitimate legislation. Such legislation, the Supreme Court recognized in Calder v. Bull (1798), is not law at all–it is a mere exercise of force, indistinguishable from the act of a robber or a bandit. It is high time the Court clarified that theft by government of a right held sacred by the Framers and critical to ordinary Americans’ peaceful pursuit of happiness will not be tolerated.
Trans Pacific Trade Pact is written to end all that PROTECTIONIST policy our FOUNDING FATHERS installed to protect and grow our American economy.....indeed from CLINTON/BUSH/OBAMA and their trade deals almost every protection for our US economy is gone. This is why our US cities have stagnant economies---why our local community economies are dead---and yes, it was Obama and Clinton neo-liberals pushing TPP as hard overseas and in Congress as they could. They want to keep our US economies dead.
'Trade officials met in Hawaii in late July with hopes of reaching a final agreement, but the talks broke down over issues that have bedeviled a potential pact from the beginning, including the removal of protectionist agricultural policies'.
We are already seeing in our US cities where global corporate campuses are the only development---all our public agencies are controlled by global corporations---what WE THE PEOPLE 99% need is PROTECTIONISM-----policy that keeps MONOPOLY AND GLOBAL CORPORATIONS at bay. Who works hardest for global Wall Street killing our local US economies? All of our Baltimore City pols ----Baltimore Maryland Assembly pols, all the global Wall Street Baltimore Development and Greater Baltimore Development 'labor and justice' organizations ----those pesky 5% to the 1% who turn around and pretend they CARE ABOUT COMMUNITIES, JOBS, GROWING SMALL BUSINESS----like THE URBAN LEAGUE----
These global corporate campuses create new businesses we are told----NO, THEY BUILD SUBSIDIARY businesses tied to the global corporations pretending to be local or regional when they are not.
East India Company: The Original Too-Big-to-Fail Firm - Bloombergwww.bloomberg.com/view/articles/2013-03-12/east-india-company-the-original-too-big-to-fail-firm Mar 12, 2013 ... In the U.K., the East India Company's extraordinary rise and fall have ... ban on Indian calicoes, and it was behind this protectionist wall that the ... the right to export the tea itself to Britain's American colonies. The arrival of this controversial corporation inflamed a flagging protest against Britain's taxes on tea.
The PROTECTIONIST policy in TPP is the laws stating there can be no local laws protecting local businesses and economies---THOU SHALT NOT PASS ANY LOCAL LAWS HARMING GLOBAL CORPORATE PROFITS. This is what global Wall Street and national media with those 5% players will say to confuse WE THE PEOPLE that TPP is good because it is PROTECTIONIST ---
The Trans-Pacific Partnership Trade Deal Explained
By KEVIN GRANVILLEMAY 11, 2015
PhotoA container wharf in Tokyo. Credit Kazuhiro Nogi/Agence France-Presse — Getty Images
Like a huge container ship pushing its way into port, the trade pact known as the Trans-Pacific Partnership has dropped anchor in Washington. The document is weighty and secret, stretching to perhaps 30 chapters. It took 10 years of talks to take shape, and it would set new terms for trade and business investment among the United States and 11 other Pacific Rim nations — a far-flung group with an annual gross domestic product of nearly $28 trillion that represents roughly 40 percent of global G.D.P. and one-third of world trade.
Trade officials met in Hawaii in late July with hopes of reaching a final agreement, but the talks broke down over issues that have bedeviled a potential pact from the beginning, including the removal of protectionist agricultural policies.
Talks will resume in the future, but the failure to reach a settlement is a setback for President Obama. In June, he successfully overcame opposition from Democrats to win trade promotion authority: the power to negotiate trade deals that cannot be amended or filibustered by Congress. Once negotiators complete the trade pact, he would need to convince Congress — his fellow Democrats, in particular — to approve the trade deal. The latest setback means the ratificatication fight will likely be in 2016, a presidential election year, raising the degree of difficulty.
The debate in Congress, whenever it takes place, would put all the elements of the trade pact under scrutiny. It would be the final step for United States adoption of the Trans-Pacific Partnership, the most ambitious trade deal since the North American Free Trade Agreement in the 1990s.
Why the Pact Is So Divisive
Supporters say it would be a boon for all the nations involved, that it would “unlock opportunities” and “address vital 21st-century issues within the global economy,” and that it is written in a way to encourage more countries, possibly even China, to sign on. Passage in Congress is one of President Obama’s final goals in office, but he faces stiff opposition from nearly all of his fellow Democrats.
Opponents in the United States see the pact as mostly a giveaway to business, encouraging further export of manufacturing jobs to low-wage nations while limiting competition and encouraging higher prices for pharmaceuticals and other high-value products by spreading American standards for patent protections to other countries. A provision allowing multinational corporations to challenge regulations and court rulings before special tribunals is drawing intense opposition.
Why This, Why Now?The pact is a major component of President Obama’s “pivot” to Asia. It is seen as a way to bind Pacific trading partners closer to the United States while raising a challenge to Asia’s rising power, China, which has pointedly been excluded from the deal, at least for now.
It is seen as a means to address a number of festering issues that have become stumbling blocks as global trade has soared, including e-commerce, financial services and cross-border Internet communications.
Trans-Pacific Partnership Countries
Total goods traded with the United States in 2015
New Zealand $8
Imports plus exports, not including services, in billions of dollars
By The New York Times
There are also traditional trade issues involved. The United States is eager to establish formal trade agreements with five of the nations involved — Japan, Malaysia, Brunei, New Zealand and Vietnam — and strengthen Nafta, its current agreement with Canada and Mexico.
Moreover, as attempts at global trade deals have faltered (such as the World Trade Organization’s Doha round), the Trans-Pacific Partnership is billed as an “open architecture” document written to ease adoption by additional Asian nations, and to provide a potential template to other initiatives underway, like the Transatlantic Trade and Investment Partnership.
What Are Some of the Issues on the Table?
Tariffs and Quotas
Long used to protect domestic industries from cheaper goods from overseas, tariffs on imports were once a standard, robust feature of trade policy, and generated much of the revenue for the United States Treasury in the 19th century. After the Depression and World War II, the United States led a movement toward freer trade.
Today, the United States and most developed countries have few tariffs, but some remain. The United States, for example, protects the domestic sugar market from lower-priced global suppliers and imposes tariffs on imported shoes, while Japan has steep surcharges on agricultural products including rice, beef and dairy. The pact is an attempt to create a Pacific Rim free-trade zone.
Environmental, Labor and Intellectual Property Standards United States negotiators stress that the Pacific agreement would seek to level the playing field by imposing rigorous labor and environmental standards on trading partners, and supervision of intellectual property rights.
Data Flows The United States wants the Pacific trade pact to address a number of issues that have arisen since previous agreements were negotiated. One is that countries agree not to block cross-border transfers of data over the Internet, and not require that servers be located in the country in order to conduct business in that country. This proposal has drawn concerns from some countries, Australia among them, that it could conflict with privacy laws and regulations against personal data stored offshore.
Services A big aim of the Pacific pact is enhancing opportunities for service industries, which account for most of the private jobs in the American economy. The United States has a competitive advantage in a range of services, including finance, engineering, software, education, legal and information technology. Although services are not subject to tariffs, nationality requirements and restrictions on investing are used by many developing countries to protect local businesses.
State-Owned Businesses United States negotiators have discussed the need to address favoritism often granted to state-owned business — those directly or indirectly owned by the government. Although Vietnam and Malaysia have many such corporations, the United States has some too (the Postal Service and Fannie Mae, for example). The final agreement may include terms that seek to insure some competitive neutrality while keeping the door open to China’s future acceptance of the pact.
Why All the Secrecy?
The office of the United States Trade Representative has said that “negotiators need to communicate with each other with a high degree of candor, creativity and mutual trust. To create the conditions necessary to successfully reach agreements in complex trade and investment negotiations, governments routinely keep their proposals and communications with each other confidential.”
But previous trade agreements were shared more openly and, despite the secrecy efforts, portions of the document have been leaking out, through WikiLeaks and other organizations.
Why Isn’t China In on the Talks?
China has never expressed interest in joining the negotiations, but in the past has viewed the pact with concern, seeing a potential threat as the United States tries to tighten its relationship with Asian trading partners. But lately, as the talks have accelerated, senior Chinese officials have sounded more accepting of the potential deal, and have even hinted that they might want to participate at some point. At the same time, the deal provides China some cover as it pursues its own trade agreements in the region, such as the Silk Road initiative in Central Asia.
United States officials, while making clear that they see the pact as part of an effort to counter China’s influence in the region, say they are hopeful that the pact’s “open architecture” eventually prompts China to join, along with other important economic powers like South Korea.
The Shadow of Nafta, and the Debate in Washington
Nafta, signed by President Bill Clinton in 1993, helped lead to a boom in trade among the United States, Mexico and Canada. All three countries exported more goods and services to the other two, cross-border investments grew, and the United States economy has added millions of jobs since then. But of course not all those trends were attributable to Nafta, and the benefits were not equal: The United States had a small trade surplus with Mexico when the pact was signed, but that quickly became a trade deficit that has widened to more than $50 billion a year. Critics of Nafta also point out that job growth in the United States does not account for the loss of jobs to Mexico or Canada; the A.F.L.-C.I.O. contends about 700,000 United States jobs have been lost or displaced because of Nafta.
Nafta was a significant victory for President Clinton after a difficult congressional battle, where he won support from just enough fellow Democrats to ensure passage. The votes were 234 to 200 in the House, and 61 to 38 in the Senate.
President Obama may yet win that kind of outcome. Working with Republican leadership in the House and Senate, he gained final approval for trade promotion authority, a critical step that allows the White House to present the trade package to Congress for a straight up-or-down vote, without amendments.
But the tortuous legislative process further soured relations with many fellow Democrats, as well as unions and progressive groups, who vehemently oppose the Trans-Pacific Partnership. Many Democrats said the president would have to address their concerns over labor and environmental standards and investor protections when he returns to Congress seeking approval of the trade deal.
WE THE PEOPLE must remember that these global corporations being brought back to US are not US----they are the same as the EAST INDIA CORPORATION. These massive corporations are owned by that global 1% empire-building and do not tolerate lost market share. Those same OLD WORLD MERCHANTS OF VENICE----MERCHANTS OF ASIA----MERCHANTS OF NEAR-FAR EAST are those on boards and those wanting protection from any US business or citizen interest that may take from its profit. These are not fair and balanced US business ethics corporations---they are that raw, empire-building corporate raider.
When our US cities like Baltimore are allowed to be one massive group of global corporate campuses----under PROTECTIONISM of Trans Pacific Trade Pact----there will be nothing but PATRONAGE non-economies for 99% of WE THE PEOPLE. Baltimore is already trapped in these failed economic policies---please make sure as we fight to get rid of them that your global Wall Street pols are not PULLING THE WOOL OVER YOUR EYES!
WE NEED THE PROTECTIONIST POLICIES PUT IN PLACE BY OUR FOUNDING FATHERS IN ORDER TO REBUILD OUR LOCAL ECONOMIES---SMALL, REGIONAL US BUSINESSES.
This is why our US ECONOMY is filled with LYING, CHEATING, STEALING, NO MORALS OR ETHICS. NO US RULE OF LAW, NO GOD'S NATURAL LAW----and we have that 5% to the 1% thinking they are PLAYERS and will push all this as they are heading under the bus---------
'East India Company: The Original Too-Big-to-Fail Firm - Bloomberg
Mar 12, 2013 ... In the U.K., the East India Company's extraordinary rise and fall have ... ban on Indian calicoes, and it was behind this protectionist wall that the ... the right to export the tea itself to Britain's American colonies. The arrival of this controversial corporation inflamed a flagging protest against Britain's taxes on tea'.
Rather than having a developed nation, broad free market economy fueled by workers earning enough to consume and live a quality of life ---we really want to go back to the DARK AGES.
The East India Company: The original corporate raiders
For a century, the East India Company conquered, subjugated and plundered vast tracts of south Asia. The lessons of its brutal reign have never been more relevant
The Mughal emperor Shah Alam hands a scroll to Robert Clive, the governor of Bengal, which transferred tax collecting rights in Bengal, Bihar and Orissa to the East India Company. Illustration: Benjamin West (1738–1820)/British Library William Dalrymple
Wednesday 4 March 2015 00.59 EST Last modified on Thursday 11 May 2017 07.31 EDT
One of the very first Indian words to enter the English language was the Hindustani slang for plunder: “loot”. According to the Oxford English Dictionary, this word was rarely heard outside the plains of north India until the late 18th century, when it suddenly became a common term across Britain. To understand how and why it took root and flourished in so distant a landscape, one need only visit Powis Castle.
The last hereditary Welsh prince, Owain Gruffydd ap Gwenwynwyn, built Powis castle as a craggy fort in the 13th century; the estate was his reward for abandoning Wales to the rule of the English monarchy. But its most spectacular treasures date from a much later period of English conquest and appropriation: Powis is simply awash with loot from India, room after room of imperial plunder, extracted by the East India Company in the 18th century.
There are more Mughal artefacts stacked in this private house in the Welsh countryside than are on display at any one place in India – even the National Museum in Delhi. The riches include hookahs of burnished gold inlaid with empurpled ebony; superbly inscribed spinels and jewelled daggers; gleaming rubies the colour of pigeon’s blood and scatterings of lizard-green emeralds. There are talwars set with yellow topaz, ornaments of jade and ivory; silken hangings, statues of Hindu gods and coats of elephant armour.
The latest in our audio long reads examines how, for a century, the East India Company conquered, subjugated and plundered vast tracts of south Asia. The lessons of its brutal reign have never been more relevant.
Such is the dazzle of these treasures that, as a visitor last summer, I nearly missed the huge framed canvas that explains how they came to be here. The picture hangs in the shadows at the top of a dark, oak-panelled staircase. It is not a masterpiece, but it does repay close study. An effete Indian prince, wearing cloth of gold, sits high on his throne under a silken canopy. On his left stand scimitar and spear carrying officers from his own army; to his right, a group of powdered and periwigged Georgian gentlemen. The prince is eagerly thrusting a scroll into the hands of a statesmanlike, slightly overweight Englishman in a red frock coat.
The painting shows a scene from August 1765, when the young Mughal emperor Shah Alam, exiled from Delhi and defeated by East India Company troops, was forced into what we would now call an act of involuntary privatisation. The scroll is an order to dismiss his own Mughal revenue officials in Bengal, Bihar and Orissa, and replace them with a set of English traders appointed by Robert Clive – the new governor of Bengal – and the directors of the EIC, who the document describes as “the high and mighty, the noblest of exalted nobles, the chief of illustrious warriors, our faithful servants and sincere well-wishers, worthy of our royal favours, the English Company”. The collecting of Mughal taxes was henceforth subcontracted to a powerful multinational corporation – whose revenue-collecting operations were protected by its own private army.
It was at this moment that the East India Company (EIC) ceased to be a conventional corporation, trading and silks and spices, and became something much more unusual. Within a few years, 250 company clerks backed by the military force of 20,000 locally recruited Indian soldiers had become the effective rulers of Bengal. An international corporation was transforming itself into an aggressive colonial power.
Using its rapidly growing security force – its army had grown to 260,000 men by 1803 – it swiftly subdued and seized an entire subcontinent. Astonishingly, this took less than half a century. The first serious territorial conquests began in Bengal in 1756; 47 years later, the company’s reach extended as far north as the Mughal capital of Delhi, and almost all of India south of that city was by then effectively ruled from a boardroom in the City of London. “What honour is left to us?” asked a Mughal official named Narayan Singh, shortly after 1765, “when we have to take orders from a handful of traders who have not yet learned to wash their bottoms?”
It was not the British government that seized India, but a private company, run by an unstable sociopath
We still talk about the British conquering India, but that phrase disguises a more sinister reality. It was not the British government that seized India at the end of the 18th century, but a dangerously unregulated private company headquartered in one small office, five windows wide, in London, and managed in India by an unstable sociopath – Clive.
There is very little a Pat Buchanan and a left social progressive would agree but there were REAL right wing conservatives in the Republican Party before Bush/Reagan. There still are only their voice has been silenced by global Wall Street Bush neo-cons just as our left social progressive voice has been silenced by Clinton/Obama global Wall Street neo-liberals.
The top priority for 99% of citizens left or right is to rebuild these PROTECTIONIST laws as originally designed---for our US small, regional, and US corporate economic market as we rebuild our US cities.
THIS SHOUTS----NO TO GLOBAL CORPORATE CAMPUSES AND FACTORIES IN US CITIES DEEMED FOREIGN ECONOMIC ZONES----THEY ARE MONOPOLIES---
'Buchanan on the history of U.S. protectionism: “Behind a tariff wall built by Washington, Hamilton, Clay, Lincoln, and the Republican presidents who followed, the United States had gone from an agrarian coastal republic to become the greatest industrial power the world had ever seen — in a single century. Such was the success of the policy called protectionism that is so disparaged today.”'
CATO is of course that far-right wing global Wall Street think tank. CATO will not tell us the ROARING 20s economic crash and Great Depression were deliberate, willful, done with malice fueled by fraud and government corruption just as today just to REBUILD our US economic policy. FDR set the stage for empire-building deregulating some of those original TRADE PROTECTIONS ---of course dismantlement soared these few decades.
The Truth about Trade in History
By Bruce Bartlett
This article appeared on freetrade.org on July 1, 1998.The ongoing globalization of economic life leaves many Americans nervous and suspicious. Pat Buchanan has played to this anxiety with his book, The Great Betrayal, a root-and-branch rejection of free trade in favor of a “new nationalism.”
In this series, Cato Center for Trade Policy Studies scholars take issue with much of what Buchanan writes, and offer an alternative perspective to Buchanan’s protectionist analysis.
Buchanan on the history of U.S. protectionism: “Behind a tariff wall built by Washington, Hamilton, Clay, Lincoln, and the Republican presidents who followed, the United States had gone from an agrarian coastal republic to become the greatest industrial power the world had ever seen — in a single century. Such was the success of the policy called protectionism that is so disparaged today.”
Pat Buchanan contends that the United States grew economically strong and prosperous because of trade barriers. But America has experienced several phases in its trade history. It is more accurate to say that the country grew in spite of import restrictions.
From Colony to Republic
British trade policy toward the American colonies was mercantilistic. The mother country expected to gain materially from all colonial trade. The Navigation Acts, as noted earlier, generally required that all colonial trade be conducted on British ships manned by British sailors. Also, certain goods had to be shipped to Great Britain first before they could be sent to their final destination. The country’s mercantilist policies were a major burden on the colonies.2 In that way, British protectionism was a significant cause of the Revolution.
Having achieved independence, however, many Americans advocated protectionist policies similar to those they had earlier condemned.3 Alexander Hamilton, the principal advocate of import restrictions, based his proposals on the alleged needs of infant industries. As he wrote in his “Report on Manufactures” (1791):
The superiority antecedently enjoyed by nations who have preoccupied and perfected a branch of industry, constitutes a more formidable obstacle … to the introduction of the same branch into a country in which it did not before exist. To maintain, between the recent establishments of one country, and the long-matured establishments of another country, a competition upon equal terms, both as to quality and price, is, in most cases, impracticable. The disparity … must necessarily be so considerable, as to forbid a successful rival ship, without the extraordinary aid and protection of government.4
The First Wave of Protectionism
Although Congress adopted the first tariff in 1789, its principal purpose was to raise revenue. Rates went from 5 percent to 15 percent, with an average of about 8.5 percent. However, in 1816 Congress adopted an explicitly protectionist tariff, with a 25 percent rate on most textiles and rates as high as 30 percent on various manufactured goods. In 1824, protection was extended to goods manufactured from wool, iron, hemp, lead, and glass. Tariff rates on other products were raised as well.
That first wave of protectionism peaked in 1828 with the so-called Tariff of Abominations. Average tariff rates rose to nearly 49 percent. As early as 1832 Congress began to scale back tariffs with further reductions enacted the following year. In 1842, tariffs were again raised; but by 1846 they were moving downward, and further lowered in 1857. Following the 1857 act, tariffs averaged 20 percent.5
Failed Tariff Policies
Economist Frank Taussig, in a thorough examination of those tariffs, found that they did nothing to promote domestic industry. “Little, if anything, was gained by the protection which the United States maintained” in the first part of the 19th century, he concluded. That finding considerably questioned the validity of the infant industry argument. “The intrinsic soundness of the argument for protection to young industries therefore may not be touched by the conclusions drawn from the history of its trial in the United States, which shows only that the intentional protection of the tariffs of 1816, 1824, and 1828 had little effect,” Taussig said.6
Thus, the early experience of the United States confirms the weakness of the idea that protection can aid infant industries. In practice, so-called infant industries never grow competitive behind trade barriers, but, instead, remain perpetually underdeveloped, thus requiring protection to be extended indefinitely. As Gottfried von Haberler put it:
Nearly every industrial tariff was first imposed as an infant-industry tariff under the promise that in a few years, when the industry had grown sufficiently to face foreign competition, it would be removed. But, in fact, this moment never arrives. The interested parties are never willing to have the duty removed. Thus temporary infant-industry duties are transformed into permanent duties to preserve the industries they protect.7
It is also important to note that the adverse effects of tariffs in 19th century America were more than offset by the economic activity that constituted the western expansion across the continent. Some 20 million immigrants came to the United States in that century. Also, much economic growth came from transportation, farming, mining, and construction of infrastructure. In effect, the United States was a giant, continental-size free-trade zone, from the Atlantic to the Pacific — the equivalent of the distance from Madrid to Moscow.
Customs Duties as a Share of Imports
Source: The Department of Commerce
Following the Civil War, some tariff liberalization occurred, mainly assuming the form of exempting items from duties, rather than reducing tariff rates. As Figure 1 illustrates, until that time, duties had covered a large percentage of imports, as shown by the close relationship between the tariff rate on all imports and that on dutiable imports only. But after the Civil War, those rates began to diverge sharply.
In the election of 1888, Republicans called for tariffs to protect American manufacturing. Benjamin Harrison’s defeat of Democrat free trader Grover Cleveland led to passage of the McKinley tariff in 1890. An interesting aspect of the 1890 debate over the tariff is that protectionists abandoned any pretense that high tariffs were needed to protect infant industries. Even mature industries, they argued, needed protection. They further argued that high tariffs were needed to reduce the Treasury’s surplus. They understood that sufficiently high rates would so discourage imports that tariff revenues would fall.8
Protectionist tariffs remained the bedrock of economic policy of the Republican Party for the next 20 years. Indeed, Republicans were so intent on passing the Payne-Aldrich tariff in 1909 that President William Howard Taft supported the 16th Amendment to the U.S. Constitution creating a federal income tax as the political price for Democratic support of the tariff.9 That has to have been one of the worst deals in history — a lose-lose situation if ever there was one.
The Underwood tariff of 1913, passed early in the administration of President Woodrow Wilson, liberalized trade somewhat. But as soon as the Republicans reassumed power after World War I, they raised tariffs again. The Fordney-McCumber tariff of 1922 generally increased tariff rates across the board. However, it also gave the President power to raise or lower existing tariffs by 50 percent.
The infamous Smoot-Hawley tariff of 1930 was the last outrage inflicted by the Republican protectionists. Rates on dutiable imports rose to their highest levels in over 100 years. Increases of 50 percent were common and some rates went up 100 percent. Table 1 indicates how much tariffs in creased during the 1920s as a result of both the Fordney-McCumber and Smoot-Hawley tariffs. A recent analysis estimates that the Smoot-Hawley tariff, on average, doubled the tariffs over those in the Underwood Act.10
Collapse of World Trade Following Smoot-Hawley
Source: League of Nations
Economists and historians continue to debate how important the Smoot-Hawley tariff was in causing the Great Depression.
MASSIVE WALL STREET FRAUD AND GOVERNMENT CORRUPTION DURING ROBBER BARON ROARING 20S BROUGHT THE GREAT DEPRESSION--NOT TRADE TARIFFS.
11 Whatever the degree, the effect certainly was adverse and the tariff was certainly bad policy. As Figure 2 indicates, world trade virtually collapsed following passage of the Smoot-Hawley tariff. Thus, if that tariff was not the single cause of the Great Depression, it certainly made a bad situation worse.
The Free-Trade Path
Politically, at least, in the long term the memory of the Smoot-Hawley tariff has kept Americans committed to a free-trade policy. For more than 60 years, a guiding principle of U.S. international economic policy has been that tariffs and other trade barriers should be reduced, that trade wars must be avoided at all costs, and that the best way to achieve those goals is through multilateral negotiations. Thus, the United States took the lead in establishing the General Agreement on Tariffs and Trade that reduced global tariffs in the decades following World War II, and spearheaded major GATT rounds of multilateral trade liberalization, including the Kennedy Round, Tokyo Round, and Uruguay Round.
In recent years, the free-trade consensus has begun to weaken. One must look back to 1929 to find protectionist rhetoric as heated as that commonly heard today. Throughout most of the postwar era, protectionists were embarrassed to call themselves protectionists. Today, however, prominent politicians such as Republican presidential candidate Pat Buchanan and Senator Ernest Hollings (D-S.C.) wear the label proudly.12 Yet protectionist policies have not been the source of America’s economic strength. And American policy, fortunately, remains largely directed toward free trade.
What a BALTIMORE SUN tied to global Wall Street Baltimore Development will not tell us is this-------the Port of Baltimore was privatized by then Governor O'Malley to a global hedge fund which was enriched by the massive subprime mortgage loan frauds including in Baltimore. What was tax revenue coming to state and city of several hundred million was signed away ----reduced to some millions as the public becomes the RENTER. This means that global hedge fund is now raking in billions---and as the Port grows with building of GLOBAL CORPORATE CAMPUSES AND GLOBAL FACTORIES----that few billion in profits will soar---none of it reaching our city coffers.
Then global Wall Street Baltimore Development, the global hedge fund, and global Johns Hopkins handed management of our Port to a CHINESE CORPORATION because of course Asian Foreign Economic Zones have those global corporations managing overseas ports. So, this global corporations is earning millions. But wait---what about the trucking and rail----oh, well all transportation coming to these US ports are owned by global trucking and BUFFETT billionaire rail corporations because our independent truckers can no longer compete.
As we see here our once strong, well-paid LONGSHOREMEN UNION is being sliced and diced as global labor pool will soon move in taking those jobs.
THIS IS WHAT US FOREIGN ECONOMIC ZONE POLICIES DO TO LOCAL FREE MARKET ECONOMIES. This Port of Baltimore is NOT PUBLIC----our tax revenue maintains for free infrastructure for all those global corporations.
GET RID OF GLOBAL WALL STREET POLS AND PLAYERS ---CLINTON/BUSH/OBAMA--NOW TRUMP
'Dockworkers' union threatens one-day strike on US East Coast ...
Feb 27, 2017 ... Tens of thousands of longshoremen are poised to shut down ports from ... ports along the East and Gulf coasts to protest “government interference” in ... On the East Coast, terminals in Norfolk, Baltimore and Jersey City, New' ..
US Constitutional trade tariffs and monopoly laws do not allow for these economic structures in our US cities.
US Foreign Economic Zones as EXPORT ONLY MANUFACTURING----will have these cargo ships bringing materials for global factories----taking away products to export overseas----nothing going on in Baltimore communities except restaurants, hotels, resorts
Port of Baltimore sets first-quarter record with 2.56 million tons of general cargo
Colin CampbellContact Reporter
The Baltimore Sun
The Port of Baltimore set a first-quarter record in 2017, handling more than 2.56 million tons of general cargo at its public marine terminals in the first three months of the year — a five percent increase from the same quarter last year, officials said.
Increases in the number of cars and containers drove the overall bump in traffic at the port, officials said. Cars were up six percent year-over-year, and containers were up eight percent, which officials attributed to the massive container ships that can now reach Baltimore through the expanded Panama Canal.
A record 538,567 containers crossed the public piers last year.
The port has led the country in shipping cars for the past six years, and it has been named the most efficient U.S. port for the third year running. It averaged 71 container moves per hour per berth, faster than any other major American port.
The port generates about 13,650 direct jobs, and is indirectly linked to 127,000 jobs across the state, officials said.