It's NAFTA, Stupid
I read the news today, and I found out:
Meeting with President Bush this week, Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon rejected the idea their countries would go along with reopening NAFTA for major revisions.
The debate over free trade has intensified in this election year in the United States.
Democrats Hillary Clinton and Barack Obamam, backed by their puppet goonie in Congress, Nancy Pelosi (A.K.A. She Who Quotes Invisible Old Testament Passages That None Other Can Find), have both threatened to withdraw from NAFTA if they could not renegotiate it as president. The North American Free Trade Agreement, they say, has cost high-wage jobs in the United States.
(I have to wonder if that means we have lost airplane loads of CEOs, football players, rocket scientists, actuaries, computer programmers, and best-selling novelists to lands overseas.)
Needless to say, the Democrats, in always attempting to cast themselves in the image of Champions for the Common Man, are focusing on winning the votes of those who feel hit the hardest by the erosion and loss of factory and manufacturing based work in the U.S.
And it's true that during the W. Bush Administration, our NAFTA trade deficit with Mexico and Canada--the two nations that allegedly have "stolen" the most U.S. jobs--has nearly doubled, going up from $77 billion the year W. took office to reach $140 billion through last year.
But of course, there is something that NAFTA paranoics, and those who seek to play upon their fears for their own power gain, aren't telling you. What they are not telling you is that 98% of that increase in the trade deficit has been in the form of increased energy imports from our northern and our southern neighbor. U.S. energy needs and demands continue to rise, and it only makes economic, not to mention political, sense to import as much of that energy that we need to from our closest neighbors who just so happen to also be our staunch allies.
Let's look at a prime for-instance that the NAFTA haters and fear-mongers target: the manufacturing-heavy state of Pennsylvania, the land of the gun-toting bitter and the religious fundies.
Well, in the midst of the admitted loss of total American manufacturing jobs, Pennsylvanians have surely benefitted from NAFTA. In the first 10 years of NAFTA (1993 through 2003), the state's exports to Canada went up by 61% and those to Mexico went up by 81%.
Last year, Pennsylvania exported over $9 billion worth of goods to Canada and over $2 billion worth to Mexico. Nearly 17% of all Pennsylvania manufacturing jobs rely directly on exports in order to be sustained. Non-farm jobs added to the Pennsylvania economy since 1993: 682,000.
Essentially, what NAFTA did was to eliminate or phase out protectionist tariffs. While tariffs can be useful, when they are erected between allies, especially adjacent allies, those fences tend not to make good neighbors. Instead, they tend to make for stagnation, loss of quality, and the bestowing of greater power to rent-seekers.
Manufacturing jobs are being lost in the United States to two forces that are not going to be except by some perverse totalitarian regime: machine automation and a global marketplace that has an ever-increasing demand for jobs that require more intelligence or higher education.
The United States has for decades now been moving away from a manufacturing economy and into a service economy. It goes without saying that in order to serve something, that something has to be made somewhere first. And that somewhere is more and more in emerging nations exemplified by China, India, and, in the wake of NAFTA, Mexico.
Overall, the American standard of living continues to rise economically. The middle class is, indeed, growing smaller in the United States...and that's because the affluent class is growing larger, with middle class people rising up into it in a slow but steady stream, as has been the case since round about 1975.
For another matter, NAFTA has not created the large influx of illegal Mexican immigrants to the U.S. anymore than it created a sudden surge of illegal Canadians coming here. You undestand, eh?
Mexicans come here because, unlike throughout the vast majority of Mexico, there is actually money here. They come here illegally because the United States is pathetically lax in enforcing its own southern border, and simultaneously has byzantine immigration laws on the books that need to be sent the way of such blue laws as "Donkeys Can't Sleep in Bathtubs".
Americans, even some notably otherwise deeply insightful American journalists and commentators that come to my mind, need to wrap their minds around the 21st century and beyond.
In the words of the “Father of modern Singapore,” Lee Kuan Yew, "I see a very troubling and at the same time exciting new world in which international boundaries can be penetrated without difficulty. The flow of information, of capital cannot be stopped. ... Whether we like it or not, technology has made this a one-world market for labor...good minds in the world will command very high salaries...our lower-end jobs are going to be taken over by our neighbors because they will be able to do these jobs for one-half, sometimes one-quarter the price.... Unions will try to protect themselves and their members’ interests, but their jobs will run out because their companies will be beaten in the international marketplace unless they can make use of cheaper labor elsewhere. … There’s no use perceiving this as a threat because it’s going to happen."
The United States has quite a supply of "good minds in the world", but must produce far more of them. No other nation can do so in the same amount or with the same rapidity. But: the will has to be there.
The counterfeit nurturance that the Democrats long to create more of in the U.S. shall do nothing but sap us of that necessary will.
Tags: Nafta , North America , Free Trade , Canada , Mexico , Counterfeit , Nurturance
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