Everyone Prospers With Free Trade

Why protectionism will only make things worse

Trade is win-win. Two people trade only because each values what he gets more than what he gives up. That's why in a store both customer and clerk say, "Thank you."

At the international level, trade is also win-win because it allows countries to specialize in what they do well and trade the extra for things they don't make as well. When free trade is unmolested, the world is richer and has more choices.

But I keep hearing about unfair trade. I'm told that trade allows American companies to exploit people in poor countries and makes Americans jobless.

Tom Palmer of the Atlas Economic Research Institute, one of my guests on my Fox Business News show tonight, says those are myths.

Do we exploit people in Third World countries?

"The evidence does not show that," Palmer said. "Multinational companies pay a wage premium. They pay more than local companies pay ... because they want to attract good workers. Look at the Shanghai factory of General Motors. They pay three times what Chinese-owned factories (pay)."

Yet House Speaker Nancy Pelosi says that liberalizing trade with Central America would exploit workers.

"People want to work at those factories. They line up. They compete. Are they competing to get exploited? They're competing for higher-wage jobs. I think that those people know their interests better than Nancy Pelosi does."

Sen. Byron Dorgan called free trade "a race to the bottom. This says to American workers if you can't compete against 30-cents-an-hour labor in some other country, you lose your job."

"Again, evidence doesn't support that," said Palmer. "Look at the iPod. It says, 'Manufactured in China.' But if you look in the back, it says, 'Designed in California.' Most of the value is added by American workers." My colleague at Fox, former Gov. Mike Huckabee, said, "In a country we can only be free if we can feed ourselves, fuel ourselves and fight for ourselves. When we start outsourcing everything, that's a road to being enslaved."

"I hope that Gov. Huckabee thought about that when he was governor of Arkansas, and made sure there was no jobs outsourced to Virginia or Texas," Palmer replied. "He should have protected the people of Arkansas, right?"

But that's different. We can count on Pennsylvania in a time of war. I don't know that I can count on China.

"If you're trading with them, it makes war much less likely," Palmer said. "We're not going to go to war with Canada. It's our biggest trading partner—$600 billion a year going across the U.S.-Canada border in trade along the longest non-militarized border in the world. Five thousand miles, counting Alaska. That is trade creating peace."

As the French economist Frederic Bastiat put it, "When goods don't cross borders, soldiers will."

Palmer offered another way to think about trade: as a machine—"a machine that allows Florida farmers to turn oranges into (phones). They can't grow cell phones on their trees in Florida. They grow oranges really well. What they can do is take those oranges and trade them for cell phones."

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  • Jaime Kelly||

    Another in a Stossel series, "Basic Libertarian Ideas for Completely Fucking Stupid People."
    Really. Has it come to this? Fucking really?

  • ed||

    Yes. Yes it has.

  • BeavisAndButthead||

    No, actually it hasn't come to this. To within 10% accuracy one could state that "nobody understands basic Libertarian ideas". We haven't ever gotten to an era of moderate understanding, so we cannot have regressed to an era where it is surprising to find people who don't understand the basics of freedom. Stossel performs a valuable service by making basic tenants of freedom accessible to ordinary people and placing a label of "Libertarian" on them. This is undeniably a good thing. Publishing them here rather than in the New York Times and People Magazine is a problem... but you gotta start somewhere. At least he's still got something of a soapbox on Fox. Perhaps some of the religious conservatives will enjoy his pieces and trundle over here to see what this "liberty" stuff is really all about.

  • ||

    Exactly. Ricaro's Law is the least understood principle of basic economics, even though it is one of the most fundamental.

  • ||

    Damned Recaro and their "e" in place of "i" ruining my joke.

  • Tman||

    I second Ed. It really is this bad in terms of knowledge of civics and economics in this country. Any libertarian perspective, regardless of the simplicity, is a light shining from above at this point.

  • ||

    Another in a Stossel series, "Basic Libertarian Ideas for Completely Fucking Stupid People Mainstream America."

    Baby steps, dude.

  • BakedPenguin||

    Exactly. Stossel has an audience that includes people who aren't familiar with Milton Friedman or Henry Hazlitt, let alone Lysander Spooner. These people have been fed a steady diet of bad economic ideas for years. You have to start with the basics.

  • Jamie Kelly||

    I just can't believe that people don't understand, or appreciate, the idea that when people trade with each other voluntarily, both sides benefit.
    FUCK!
    Time to burn down the public schools.

  • ||

    No, not burn them down. Simply auction them off to folks who want to teach without all the propagandizing, rule-making and -enforcing, staff, corruption ... in short, without federal, state or local government involvement at all. Use the proceeds to pay off the school districts' bond debt and the early termination clauses in all of the superintendants' and assistant under-deputy boot-lickers' - and girl friends' - employment contracts.

  • BakedPenguin||

    It is truly sad how many people think market transactions are zero-sum.

    And that political ones aren't.

  • Wegie||

    "I just can't believe that people don't understand, or appreciate, the idea that when people trade with each other voluntarily, both sides benefit.". Really...who won the last Presidential race?

  • Anomalous||

    Most Americans, when they hear the name Hayek, think of Salma. Of course, there are two reasons for that.

  • Ragin Cajun||

    Mike Huckabee, said, "In a country we can only be free if we can feed ourselves, fuel ourselves and fight for ourselves. When we start outsourcing everything, that's a road to being enslaved."

    So our economic policy should be mercantilism? Protectionism? What a great president he would be!

  • ||

    I greet the thought of "President Mike Huckabee" with the same enthusiasm that Indiana Jones greets a box of snakes on his doorstep.

  • BakedPenguin||

    I greet the thought of President Mike Huckabee with nausea. Mitigated somewhat by the fact that people with advanced degrees have a slightly easier time emigrating. I'm working on learning a second language, too, since that can't hurt.

    Huckabee would be pretty much like Obama, except with pious, sanctimonious sermons instead of dishonest, manipulative rhetoric. And while I can't currently think of what Huckabee could do to make him a worse president than Changey McEmptySuit, I've thought that before.

  • Ragin Cajun||

    And while I can't currently think of what Huckabee could do to make him a worse president than Changey McEmptySuit

    Nationwide crackdown on Happy Meals?

  • BakedPenguin||

    RC, good point. He'd probably reappoint "I can't control myself, therefore we need to arrest people who sell bad food" David Kessler back to the FDA.

    The Mexican cartels would start smuggling Taco Bell into the US...

  • ||

    Psst. Cinco dollars por uno burrito, senor?

    Plus there is his Christian Fundamentalism. He'd up the WoD about 10 notches.

  • Schillky||

    A la South Park and KFC with the Colonel in a Tony Montana persona.

    "Don't you fuck me, Eric. Don't you ever fuck me."

  • ||

    I just wish "Governor Mike Huckabee's" robot would quit calling my answering machine. It stores only a limited amount of audio bits before clogging up and not allowing subsequent callers to leave a message.

  • ||

    Damn, what mortal sin did you commit to get on that list?

  • ||

    Unfortunately, China's comparative advantages as manufacturing hub are largely due to lack of environmental regulation and access to effective slave labor. If you are OK with that and it fits well into your world view, go for it.

    Hard to see how US lack of ability to manufacture nuke facilities, steel for giant bridges, etc. is a good thing. Then again, we're world leader in artisan sandwiches and CDOs.

  • MrGuy||

    ...and the entertainment industry across the board.

  • Ragin Cajun||

    No, you're right. We must cut off trade with the Chinese. That will show them!

  • ||

    Yes, that's exactly what I suggested. You win.

  • Ragin Cajun||

    Please forgive my sarcasm, for I am a dick sometimes. I would, truly, like to know the better path to take. I am afraid that I don't see how a more protectionist policy does anyone any good.

  • ||

    Hard to see how US lack of ability to manufacture nuke facilities, steel for giant bridges, etc. is a good thing. Then again, we're world leader in artisan sandwiches and CDOs.

    So China should start building its own airplanes? Because Boeing is one of the largest exporters in the world and last time I checked they are an American corporation. I'll let you break the news to all of the Boeing employees that you think it is important for China to have a domestic aviation industry to obviate their need for importing passenger planes.

  • Comrade Zero||

    What about Airbus?

  • Colonel_Angus||

    Fuck dat euro shit. The only reason to have them around is to keep Boeing honest. I'm waiting for some economy carrier to pick up some Ilyushins or Tupolevs.

  • ||

    Can't China be adequately defined as both mercantile and protectionist though?

  • Ragin Cajun||

    Probably.

  • Nitori Kawashiro||

    Can they grow bananaphones?

  • Tony||

    I see a defense of trade, but not free trade. Just a very, very basic Stosselesque epiphany about how trade = good. Okay, and...?

  • Ragin Cajun||

    And what is the definition of free trade?

  • MrGuy||

    Free Trade: Someone gives you somthing and you give them nothing.

  • Metazoan||

    Admittedly, that is what Chony wants (for itself only, of course).

  • Tony's Dictionary||

    Free trade: Where government scrutinizes and regulates every financial transaction, down to the proverbial kid's lemonade stand and garage sales.

  • Kroneborge||

    All valid points by Stossel. But he misses something about todays trade (something Ricardo pointed out).

    Trade and comparitive advantage ONLY work when both sides have something to trade.

    When one side is going most of the buying and one side most of the selling, that doesn't work out for long.

    The solutions to a lot of the problem would be other countries opening up more for US goods. Combine that with some FX changes, and the US getting off of foreign oil (that's where a lot of the trade deficit is) and that would fix most of it I think.

  • Fatty Bolger||

    Trade and comparitive advantage ONLY work when both sides have something to trade.

    When one side is going most of the buying and one side most of the selling, that doesn't work out for long.

    Both sides DO have something to trade. One side has currency; the other has the product being bought. The seller would rather have the currency; the buyer would rather have the product. See how that works?

  • ||

    But one side (the U.S.) only has currency because they borrowed it from the other side (China). Basically, China is lending us the goods they provide.

  • Hu Jin Tao||

    Why are you trying to do sex to me?

  • Leslie Chow||

    YOU TRY FUCK ON ME??!!

  • ||

    We are the world's largest exporter of goods, stop pretending that all we are doing is maxing out an international credit card. You're making the same exact excuse the mercantilists made in Adam Smith's day. And you're just as wrong.

  • ||

    You're making the same exact excuse the mercantilists made in Adam Smith's day. And you're just as wrong.

    If people read Adam Smith we wouldn't be where we are today.

  • What does||

    TV's Batman have to do with anything?

  • ||

    Adam West not Adam Smith man

  • Adam West||

    Hey... I'm Mayor of Quahog, Rhode Fucking Island! Show some respect.

  • TheCheeseStandsAlone||

    You are correct:

    "we are the world's
    largest exporter of goods"...

    The United States has many ad-
    vantages over other countries
    that make this possible...

    Simultaneously, we are also the
    largest importer of consumer goods,
    a significant contributor to the
    "credit" economy, to which we are,
    in turn, the largest debtor nation
    in the history of mankind...

    Seeking balance in free trade will
    not solve this problem...

  • Joshua||

    Our free trade helps us. No matter what China does, it helps us. If they have barriers to entry, then we get cheaper stuff.

    Now we've been trading green pieces of paper to China for stuff for a long time & they've actually been giving those pieces of paper back to us! It's almost like we're getting free stuff, except someday they're probably going to want their green pieces of paper back.

    So when they get their greenbacks back what are they going to do with them? Buy Stuff! Where's the best place to buy stuff with greenbacks? The US! There will be no long-term trade imbalance.

    If the US wasn't such a debt-whore, there'd be no short term imbalance either.

  • robc||

    Hazlett covered this.

    Just like in the 80s when we were buying stuff from Japan and shipping them an equal amount of NYC skyscrapers and Hawaiian golf courses.

  • ||

    So the loss of the World Trade Center was a tax write-off for a Japanese corporation, then? Oh, no, we "shipped" the buildings to them. Sorry, I missed that part.

  • JD||

    Trade and comparitive advantage ONLY work when both sides have something to trade.

    I'll say. I buy a ton of stuff from the grocery store, and those bastards NEVER buy anything from me. I'm going to have to start imposing a tariff on them.

  • Kroneborge||

    All valid points by Stossel. But he misses something about todays trade (something Ricardo pointed out).

    Trade and comparitive advantage ONLY work when both sides have something to trade.

    When one side is going most of the buying and one side most of the selling, that doesn't work out for long.

    The solutions to a lot of the problem would be other countries opening up more for US goods. Combine that with some FX changes, and the US getting off of foreign oil (that's where a lot of the trade deficit is) and that would fix most of it I think.

  • Michael Ejercito||

    When one side is going most of the buying and one side most of the selling, that doesn't work out for long.


    So because trade between me and Smart & Final consists entirely of me buying and Smart & Final selling, it will cease to work out eventually?

    When will it stop working out?

  • robc||

    When one side is going most of the buying and one side most of the selling, that doesn't work out for long.

    Ummm...every exchange involves 2 buyers and 2 sellers. I buy a chicken for some pieces of paper. You buy some pieces of paper for a chicken.
    Im selling currency, you are selling chicken. Currency is a measure of past production (or future if I borrow it), so either way, production and consumption balance.

  • Kroneborge||

    All valid points by Stossel. But he misses something about todays trade (something Ricardo pointed out).

    Trade and comparitive advantage ONLY work when both sides have something to trade.

    When one side is going most of the buying and one side most of the selling, that doesn't work out for long.

    The solutions to a lot of the problem would be other countries opening up more for US goods. Combine that with some FX changes, and the US getting off of foreign oil (that's where a lot of the trade deficit is) and that would fix most of it I think.

  • BakedPenguin||

    Part of it is that China is keeping their currency devalued as a deliberate ploy to promote exports. This also means that they will have "less" money to purchase goods.

    They are about to get screwed, though. The currency re-valuation will have to occur, since you can't cheat reality forever. And when it does, all of the US bonds they've purchased will devalue 20 to 50%. This is almost exactly what happened to Japan in the late 80's & early 90's.

  • pmains||

    China has allowed its currency to appreciate 20% or so against the dollar over the last 5 years. If you understand how trade deficits work and why, this isn't at all surprising.

  • pmains||

    I forgot to add, and there was no impact whatsoever on the trade deficit. None. Nada.

  • pmains||

    If tomorrow we found huge oil reserves in Minnesota or somesuch, it would not affect the trade deficit one bit. Trade deficits don't happen because we lack manufacturing capacity. They happen because people want to invest in America by buying our stock, bonds, and low-interest debt. This gives us a surplus of cash, which is then spent on consumer items. If the investment money wasn't there, then spending would slow down.

    This is why our trade deficit correlates to our economic strength rather than to our manufacturing strength. When our economy suffers, less investment comes in, and we tighten our belts. When the economy is doing well, then investment flows here and we spend our way into deeper debt. I can't emphasize this enough: the only way to reduce the trade deficit is to purposefully sabotage the American economy.

  • Kroneborge||

    AHH, sorry for the extra posts.

  • ||

    Don't both side benefit from Fair Trade as well? So why not push for that instead?

  • ||

    Free trade is fair. No one is forced into it so everyone makes the decision based on their needs and/or wants from the transaction.

  • ||

    Of course people are forced into trade. You can only go without eating, drinking, and having shelter for so long.

  • Old Mexican||

    Re: Dan,

    Of course people are forced into trade. You can only go without eating, drinking, and having shelter for so long.

    . . . and that makes you feel like a prostitute every time you buy an apple . . . right???

    Be real, Dan.

  • ||

    Be real, Dan.

    Be real, OM.

  • ¢||

    Don't both side benefit from Fair Trade as well? So why not push for that instead?

    The determiner of what's Fair™ picks who "both sides" are, tells them what to Trade, and the cost of bribes is passed onto customers.

    Fascist, yo.

  • ||

    At the international level, trade is also win-win because it allows countries to specialize in what they do well and trade the extra for things they don't make as well. When free trade is unmolested, the world is richer and has more choices.

    --And if a country does not choose to play fair trade then what? China does not have fair trade with the rest of the world. It is running a protectionist country. It has a huge manufacturing base. It would seem if you want to follow a model to make your country a powerful manufacturing based Country you should follow the Chinese model.

    But I keep hearing about unfair trade. I'm told that trade allows American companies to exploit people in poor countries and makes Americans jobless.

    Tom Palmer of the Atlas Economic Research Institute, one of my guests on my Fox Business News show tonight, says those are myths.

    Do we exploit people in Third World countries?

    "The evidence does not show that," Palmer said. "Multinational companies pay a wage premium. They pay more than local companies pay ... because they want to attract good workers. Look at the Shanghai factory of General Motors. They pay three times what Chinese-owned factories (pay)."

    --So what? What is the average wage of a Chinese factory worker? What is the average wage of a Shanghai worker? What is the wage of a US autoplants worker? Without facts to compare this statement is worthless. Do Chinese workers have OSHA? Do Shanghai workers have an OSHA? What is the cost of OSHA on American Competiteveness?

    --I mean if the Chinese factory pays a dollar an hour, and the Shanghai worker gets 3 dollars an hour, and US worker gets 45 dollars an hour, then theirs a bit of unfair competition going on here.

    Sen. Byron Dorgan called free trade "a race to the bottom. This says to American workers if you can't compete against 30-cents-an-hour labor in some other country, you lose your job."

    "Again, evidence doesn't support that," said Palmer. "Look at the iPod. It says, 'Manufactured in China.' But if you look in the back, it says, 'Designed in California.' Most of the value is added by American workers." My colleague at Fox, former Gov. Mike Huckabee, said, "In a country we can only be free if we can feed ourselves, fuel ourselves and fight for ourselves. When we start outsourcing everything, that's a road to being enslaved."

    "I hope that Gov. Huckabee thought about that when he was governor of Arkansas, and made sure there was no jobs outsourced to Virginia or Texas," Palmer replied. "He should have protected the people of Arkansas, right?"

    --So whats your point? Your arguing that hes hypocritical. Fine. How does your statement refute his argument? It doesn’t. So its irrelevant. Stop wasting my time and argue based on facts and figures.

    "If you're trading with them, it makes war much less likely," Palmer said. "We're not going to go to war with Canada. It's our biggest trading partner—$600 billion a year going across the U.S.-Canada border in trade along the longest non-militarized border in the world. Five thousand miles, counting Alaska. That is trade creating peace."

    --BS! Your not going to war with Canada, for a whole lot of different political and social reasons. One of them is trade, but if we ever elected a Communist government or started raiding your border for reasons that I cant even think of, that would probably change, no matter what our trade balance is.

    --Before World War 1 who was Frances biggest trading partner? I believe it was Germany The same thing with World War 2. Oh look at that Germany again. Trade does not and has never caused peace. I have 5000 years of human history to back that up. What do you have? The hopes and prayers of a bunch of economics profs who don’t work in the real world, and wouldn’t know a history book if it got up and slapped them in the face.

    As the French economist Frederic Bastiat put it, "When goods don't cross borders, soldiers will."

    --So both World Wars were fought because the Germany was being shut out of Frances economic market? Is that what your saying? Cause Im pretty sure that would get laughed out of any history class anywhere in the world.

    And when people do this worldwide, they get richer. "Just like the case of you buying some coffee at the Starbucks. You could have made your own coffee. But your time might have been better spent doing something else. So you outsourced your coffee production. You made yourself better off. And that young lady who sold you the coffee made herself better off."

    --Except the statistical facts have shown that only the top 5 percent in the US have become richer. What about the other 95 percent? Sure raw GDP has gone up hugely but are the average people better off for it? Hell no.

    "And it crumbled because they destroyed their trade. They made it illegal to trade with foreigners. And they turned inward. That set in process a stagnation that only now is being undone. We shouldn't do that to our country."

    --How did the US become the leader of the 20th century? Because of Protectionist policies of Lincoln, Mckinley and Teddy Rosevelt. When did Britain start its decline as a major world power? When it adopted a policy of free trade. Could Chinas decline have been do to a number of other factors? Hell yeah. How has China become a leading industrial power on the planet? Was it do to following policies of Free Trade? No.

    We're different, aren't we? We know how to make everything we need. "There's always opportunities for new progress. ... Remember watching 'Star Trek' as a kid and they had that weird communicator? Everybody has one now. ... (T)rade made that possible."

    --Is it possible the cell phone could have been developed before free trade…Hmm..Yes it was! It was invented in 1973! So…Instead of making an argument a bunch of stuff that is completely irrelevant to the topic at hand, why don’t you actually address the so-called myths and talk about the real issues.

    Or stop wasting my time.

    DM

  • Naga Sadow||

    Quit wasting my time, March.

  • ||

    A valiant effort, but ultimately filled with pith and not truth.

    First, ever hear of Cordell Hull? He was a major author of the Bretton Woods agreement. His thesis was that the existence of trade barriers was a major factor in the start of both World Wars. You're wrong about France and Germany being each other's largest trading partners, period. Put up a reference or stop wasting my time with your myths.

    China, in some senses, and like most nations, has implemented some economic protectionism policies. But China runs trade deficits with several southeast Asian nations, especially Taiwan and South Korea. American goods are considered luxury items there, and our exports to them are growing year by year. We're still the world's second largest exporter, so our net trade balance isn't so bad when you look beyond our deficit with one nation.

    Your blathering about the top 5% getting richer while everyone else stays the same has been talked about over and over and over here, so for my own sanity I'm going to let you fend for yourself there, bud.

    But nice try on the two major points you made.

  • ||

    The whole European trade situation before, during, between, and after the two world wars is a great case study. It's perhaps best documented in the book "Power and Plenty: Trade, War, and the World Economy in the Second Millennium." You may find that it completely disagrees with your preexisting notions as stated above, but nevertheless it's worth a perusal.

  • mr simple||

    David March? More like David Darch. Your fundamental ignorance about the issue makes it impossible to correct all your flaws, Darch. Why would people need to make as much as the US in another country if their price levels are much lower, eh Darch? Why would people work in these factories if they didn't think the pay was fair? Of course everyone wants to make more. Go read a book and educate yourself, Darch. And people above wondered if these elementery lessons were necessary.

  • ||

    I recommend Basic Economics by Thomas Sowell.

  • Wayne from At The Water Cooler||

  • Nicholas Adams||

    This is all well and good, but the "analysis" assumes that "free trade" is what is going on here. Tell that to Mexico where over 1 million corn farmers were put out of business by a flood of ridiculously subsidized US corn. Tell that to the subsequently unemployed Mexican workers who get recruited by giant food processing companies to work illegally in the US. When the Federales come and round them up, the companies look the other way, meanwhile none of the executives face any legal ramifications, just the benefits of cheap, and illegal, labor.

    Anybody who doesn't see that, in part, free trade agreements are about letting corporations avoid paying external costs in the form of environmental protection, wages, and workplace safety is a fool. We are essentially paying a tariff in the form of increased environmental degradation and a lower standard of living for middle and lower class Americans.

  • ||

    Government calling something "free trade" doesn't make it free trade. It's paper cover for mercantilism at best, imperialism at worst.

  • unhyphenatedconservative||

    France was one of Germany's biggest trade partners, right before Germany invaded France. Pointing to the fact that we have peace with Canada as the overwhelming evidence that trade partners don't fight is either evidence of Stossel's intellectual flacidness or his contempt for the intelligence of his audience.

  • pmains||

    A little apples and oranges, don't you think?

    Milton Friedman pointed out that we (the United States) have never gone to war with or attacked a country that has a McDonald's. (That was true until we bombed Serbia.) The idea that trade promotes interdependence and peace doesn't mean that trading partners will never go to war, but they're much less likely to.

  • unhyphenatedconservative||

    What about Russia/Georgia? U.S./Panama? U.S./Iraq? India/Pakistani skirmishes over Kashmir? Lebanon/Israel?

  • Soonerliberty||

    Read and comprehend: "much less likely." These are exceptions to the general rule of everyone prospering and not fighting. If we list all of those countries vs. your few, then you might understand - might, but you're obsessed with war and bad economic theory.

  • NeonCat||

    Although Britain was Germany's biggest trading partner before WW I, there were after all some mitigating circumstances, particularly weapons races and those entangling alliances George Washington warned us against - the same kind of entangling alliance that caused us to bomb Serbia.

  • π||

    Strange you bring that up. I fought hard against that one. Even today Americans are clueless what really happened, despite the NATO general commanding operations in Bosnia warning we were on the wrong side. It's my belief we had no business being there on any side period.

    Nonetheless, Srebrenica is always throw out as if it was just cause without ever a mention of Vukovar or any of the other mass slaughters of Serb civilians, not just military age males, but men, women, children and babies many tortured to death. Srebrenica was retaliation. It was carried out by irregulars and had nothing to do with Serbia. It's easy to sit here in comfort and judge, they weren't your family being retaliated for. It's always easy when it's someone elses loss.

    Clinton supplied military support, weapons, intelligence, and air cover for the al-Qaeda backed local terrorist factions. Bin-Laden interpreted this as a clear sign from Allah that the Great Satan is weak and ripe for defeat, 9-11 was the direct result.

    Of course Clinton turned down offers to be handed bin-Laden, he had us fighting as bin-Laden's ally.

    Bush carried on the same path setting great precedence with his give-away of Kosovo to please the Albanian alliance, this would be equivalent to Great Britain giving what our east coast to Cubans. Albanians are the most violent mafia in this country according to the FBI. They make large contributions to our politicians.

    Serbs were our allies through two World Wars, we thanked them the second round by throwing them to the communists who most Serbs considered Red Nazis. Despite all that they wanted to westernize badly and planned to once Milosevic was gone. Milosevic was despised, and a couple months away from the end of his presidency when we bombed.

    Serbs aren't Arabs, they can fight. Downing a stealth fighter with an antiquated Soviet SAM is a feat requiring incredible tactical skill. When our bombing campaign failed to hit their incredibly well concealed military targets we switched to civilian targets such as passenger trains, city bridges during high traffic hours hitting them again after emergency crews arrived to deal with the casualties, and a large child day care center at mid day.

    We shouldn't have been there, period, but we were, and still are, and what we did was absolutely unforgivable.

    The media shares guilt in these crimes equal to the politicians.

    As for the politicians, Democrat or Republican they are Mutt and Jeff, good cop and bad cop, they're playing us from two sides with one goal - their absolute power. They have no morals, principles, or consciences.

    Of course George Washington was right. And for today's average American Washington and the other Founders are irrelevant as is our Constitution. None of this could be happening if we'd only stuck to the original vision, if we'd only remembered where we came from, if we'd just hung on to what is important.

  • ed||

    Whenever I hear Stossel try to explain things to American adults that they should--almost by virtue of being Americans--understand almost genetically, I get a little sad. It's like Mr. Rogers teaching principles of liberty to the "Special" class.

  • ||

    Or, perhaps you could consider that Stossel only presents a very simplified view of trade that most Americans understand works a lot better in theory than in reality.

    Like most libertarians, Stossel completely ignores the issue of economic power and how it can be used to create trade agreements that benefit one side far more than the other.

    These days, you can drive through just about any small town in America and see the "positive" effects of outsourced industry combined with the vulture of Walmart picking the bones clean and sending the profits out of town.

  • ||

    State and local politicos have considerably more concentrated power and have been working the economy to the benefit of themselves and their buddies for a very long time. That's what you see when you drive through Smallville, USA: the consequences of long-term crony capitalism. Unless the "small town" is really a big town that got shrunk; for which see "Detroit". Where do you think that the politicians at the Federal level learn to want the stuff they cheat to get in Washington? Local politics. What's the most common criticism of a new face in national politics? "No experience at the state or local level." Phrased differently, to be sure, but essentially the complaint is that this person won't play the game. "Reward your friends and punish your enemies" is the first rule of state and local politics.

  • .||

    sending the profits out of town

    Profits, as in Walmart employees' paychecks? That they spend in that same town? To the benefit of the other merchants in town who also employ people from the town?

    Begone, troll.

  • ||

    No, the Walmart employee's paychecks are not profits. And if your theory here is correct, then Walmart's presence in a small town should increase the number of other merchants. But in reality the opposite happens.

    Walmart is like a vampire - the business model is to suck small towns dry and then leave.

  • Ghost of Schrödinger's cat||

    Walmart is like a vampire - the business model is to suck small towns dry and then leave.

    It's in appendix CIV of their annual report, written in invisible ink.

  • Ray Pew||

    No, the Walmart employee's paychecks are not profits. And if your theory here is correct, then Walmart's presence in a small town should increase the number of other merchants. But in reality the opposite happens.

    WalMart's presence can definitely decrease the number of direct competitors, but that does not mean that ALL business decreases. From my experience, more businesses emerge in areas with WalMart.

    Walmart is like a vampire - the business model is to suck small towns dry and then leave.

    Since WalMart is in thousands of cities, where will it go after there are no more areas left?

    WalMart doesn't hurt other businesses; consumers do, by choosing WalMart over the competition.

  • ed||

    Walmart's secret plan is to drive out all the other businesses in town so nobody in the town will have a job and a paycheck and money to shop at Walmart. It's truly nefarious!

  • ||

    So, Wal-Mart forces people to patronize its stores?
    The anti-Megalo-Mart brigade is so tired.

  • Peter Jensen||

    As usual Stossel "chooses" to tell only part of the story.

    Free trade works well between partners who adopt the same rules on labor for example. Otherwise it's just a one way thing. (Aka US-China.)

  • ||

    Free trade works well between partners who adopt the same rules on labor for example. Otherwise it's just a one way thing. (Aka US-China.)

    In the first place that is an incorrect statement. Chinese workers are not under any obligation to conform to anyone else's labor "rules". In the second place if companies want to sell Americans their Chinese made goods for less than the marginal cost you are free to ignore them but the millions of Americans who benefit would prefer that you mind your own business.

  • ed||

    Or: If somebody wants to give you a subsidized gift, why should you object? For moral reasons? You are free to decline it, and you should if you have reason to believe it was made by, say, slave labor. But the fact that a Honda made by nonunionized Americans is better able to compete with a Chevy made by unionized Americans is hardly "unfair." And, again, you are free not to buy the Honda, if you think nonunion factories are akin to slavery.

  • π||

    One of the first conflicts we faced as a new nation was one that helped spark the Revolution, interference with our international trade, the molesting of our merchant ships on the high seas. Trade is good, and I agree it's the best ambassador for peace. It can't solve every problem of course, but we don't cancel a vacation just because our flight is delayed, and we likewise shouldn't abandon free trade because there are relatively minor problems associated with it. The benefits outweigh the disadvantages considerably.

    By the way, jobs going over-seas has nothing to do with free trade, it's the result of unions extorting sweet deals for their members and either killing the industry here and putting it in it's grave so it pops up elsewhere to supply a demand, or making it impossible to turn a profit without relocating over-seas.

    Anyone can put a nut on a bolt all day, only an union can make such skills priceless.

  • ||

    Anyone can put a nut on a bolt all day, only an union can make such skills priceless.

    But again, when an individual with very limited economic power has to deal with a collective with lots of economic power, the individual is going to get a raw deal.

  • The Reason commentariat||

    We keep telling you that about government, but you insist we're a bunch of loonies.

  • ||

    No, I agree that individuals often get a raw deal from the government. But you guys are convinced that only the government can give people raw deals...and at the very least, in a democratic form of government the individual does have a stake.

  • Ray Pew||

    No, I agree that individuals often get a raw deal from the government. But you guys are convinced that only the government can give people raw deals...and at the very least, in a democratic form of government the individual does have a stake.

    Business can most definitely give individuals raw deals, just as all individuals can give each other raw deals. The reason why some view government differently is that there is no alternative to its deal, whereas the private sector is composed of numerous alternatives.

    I'm not sure what you mean in regards to the "stake" individuals have in government. I would argue that they have a stake in both private and public matters, each with their own issues in addressing grievances.

  • The Libertarian Guy||

    Dan, at least when a business gives a raw deal, there's legal recourse. When government fucks your dog, you can't sue them.

  • Tony||

    But you can change who runs it every 2 and 4 years.

  • The Libertarian Guy||

    I can "change" by using vanilla cake frosting instead of toothpaste, Tony, but just because they look similar doesn't mean they produce the same results.

    So, tell me why I should vote for either the red shit sandwich or the blue shit sandwich.

  • ||

    "But you can change who runs it every 2 and 4 years."

    You can change where you shop every 2 and 4 minutes.

  • ||

    "We keep telling you that about government, but you insist we're a bunch of loonies."

    He shoots, he scores.

  • ||

    You are correct, if and only if the government is able to prevent strikes, boycotts, and other labor responses to genuine exploitation. The labor unions were given unwarranted power by the government, to match the unwarranted power already exercised by the factory owners. Not the optimal solution, as it created increasingly sub-optimal labor arrangements, benefiting mainly union leadership and their political allies ... oh, and the factory owners also. Guess who got the shaft? No, not Rhodesia!

  • Fist of Etiquette||

    You can't start that high on the sarcasm ladder, John. There are no rungs above you for the rest of the show.

  • Fist of Etiquette||

    Stossel's tie is redder.

  • Fist of Etiquette||

    NO WAY! Government knows better.

  • Fist of Etiquette||

    Also we're not going to war with Canada because we're a bunch of hosers.

  • Fist of Etiquette||

    John, you stepped into Palmer's trap.

  • Fist of Etiquette||

    Making China richer is TREASON!

  • Fist of Etiquette||

    Audience didn't understand the question.

  • Fist of Etiquette||

    I hope you didn't talk to the workers in that prat accent.

  • Shannon||

    The critical piece that Libertarians miss about American trade policy is this:

    In every single case, our balance of trade declines with the country we sign a free trade agreement with.

    We're losing money on every deal, and the argument is that we're going to make it up with increased exports. That didn't work for pets.com, and it's not working for the United States.

    Protectionism is good for America. It worked for 200 years, and getting rid of it has not worked to our advantage. Which is why China, Japan, Korea and Taiwan are some of the most protected economies on Earth. Because they know it benefits them.

  • ||

    We're losing money on every deal, and the argument is that we're going to make it up with increased exports.

    Who is losing money? When I buy a product made where labor costs are not subject to unions and minimum wage laws and regulation, it, read this carefully, saves me money.

    Oh, you mean people who have had their wages artificially increased by government lose money. Well, no shit. That is a feature, not a bug.

  • Fist of Etiquette||

    "Managers tend to be male."

    Ouch for the ladies.

  • Fist of Etiquette||

    Stossel could do a whole show with June. She's interesting.

  • Fist of Etiquette||

    Johan doesn't like to being upstaged by June, but he should have bought a plane ticket.

  • Fist of Etiquette||

    You better slap a tariff on your shoeshiner.

  • Fist of Etiquette||

    That graph just called bullshit on Dobbs.

  • Fist of Etiquette||

    Stossel is hyping up Lou pretty good. There better be fireworks.

  • Fist of Etiquette||

    Lou Dobbs, Captain of Industry

  • Fist of Etiquette||

    John doesn't like sarcasm that isn't dripping profusely.

  • Fist of Etiquette||

    Common enemy.

  • Fist of Etiquette||

    Lou Dobbs, Jingoist

  • Fist of Etiquette||

    Dobbs is campaigning and Stossel isn't making it easy.

  • Fist of Etiquette||

    Coming up, the duel.

  • Fist of Etiquette||

    Truly free trade has the possibility of putting one side at a disadvantage.

  • Fist of Etiquette||

    All good policy books lead a lot of room for reader inference.

  • Fist of Etiquette||

    Palmer blew up the condescension meter.

  • Fist of Etiquette||

    Because nobody doesn't want to go to Alabama.

  • Fist of Etiquette||

    You can't give your vote to a self-correcting trade differential.

  • ||

    Fist has a trade deficit with this thread. I just hope Lou Dobbs will get here in time to correct this gross injustice.

  • ||

    Fist has a trade deficit with this thread.

    Not to worry, simply a slight crystal meth overdose. Nothing to see here, move along.

  • Fist of Etiquette||

    No one ever wants to live blog Stossel with me.

    (Well, no one but pingback.)

  • ||

    Was it me or did it sound like Lou Dobbs was running for office? He was exceptionally eellike tonight.

  • ||

    Dear Mr. Stossel,

    You're a national treasure. This particular column is an antique. Adam Smith wrote it 234 years ago.

    Cordially,
    Sal Anthony

  • ||

    Adam Smith wrote it 234 years ago

    And people still don't get it.

  • Some Guy||

    This says to American workers if you can't compete against 30-cents-an-hour labor in some other country, you lose your job."

    If someone in a third world country can do your job for 30 cents an hour, then your job is only worth 30 cents an hour (plus whatever costs would be involved in outsourcing/shipping, I suppose.)

  • Peter||

    Stossel is a big tool. He keeps spouting this simplistic orthodoxy that ignores reality. Free trade never has and never will exist. Name a country that has ever practiced free trade? Even states don't practice free trade between each other. One state's corporate taxes differ from the other, just to name one variable, and that distorts the whole market. Add in all the other variables that affect trade (the inability of labor to migrate freely - Arizona, are you listening) and it is clear the notion that trade can be free is at best a theory that only works in a vacuum (maybe Stossel's head). The history of America and all its economic growth is based on trade that is highly structured and far from free. And the throw away line that we don't exploit developing countries...what are you guys smoking? These are not equals agreeing to a transaction thatr mutually benefits both parties. Agents in developing countries make agreements at the end of the barrel of a gun (or nuclear warhead, aegis missile, drone...whatever). They agree because they have no choice. That's the same agreement employees at Walmart make because they would rather not DIE!

  • Some Guy||

    Free trade never has and never will exist. Name a country that has ever practiced free trade?

    Yet more free is still better than less free.

    Agents in developing countries make agreements at the end of the barrel of a gun (or nuclear warhead, aegis missile, drone...whatever).

    What was the last country we nuked for not trading with us?

    They agree because they have no choice. That's the same agreement employees at Walmart make because they would rather not DIE!

    So you agree that WalMart provides them with life-saving income, but you're against it anyway?

  • bob||

    The amount of sanctimonous bullshit here is amazing. I'm guessing that you guys don't like basic physics either because all the examples assume conditions that don't happen in real life. Thats because things are fucking complicated. Settle down and appreciate that one person out there is trying to help.

  • ||

    The argument is wrong because "richer" clashes with "more choices." For starters, not everyone can be richer for the obvious reason that for a country to be richer through exports another has to import. If both do the same, then there's no net gain for either.

    Second, in order to be richer, one has to produce and sell more, but that also means another will have to produce and sell less because consumption of goods produced cannot continue without a limit. That means there will be fewer--not more--choices.

    In short, when one looks at free market capitalism, which is what this topic is about, one realizes that "free market" clashes with "capitalism." The result is the present crisis.

    Of course, one can argue that the present crisis is caused by government intervention. That's also wrong. Most of the money supply consists of unregulated derivatives; in short, total money supply is hardly dependent on central banks but on commercial banks which are needed for free market capitalist systems. What we have is a global economy that hardly involves government intervention.

    In the end, we have increasing money supply needed for increasing production that in turn is dependent on increasing consumption. The result, not surprisingly, is a credit crunch, environmental damage, and peak oil.

  • ||

    "Trade is win-win. Two people trade only because each values what he gets more than what he gives up." That's quite an assumption. Firstly it assumes that both parties have a full understanding of what they are giving up. People overseas buying cheap subsidized US farm goods don't necessarily understand that part of what they "trading" is their home countries agricultural capacity. It also assumes that consumers have a choice. I don't necessarily WANT to subsidize Monsanto, but I cannot afford to feed my family without a large portion of the food budget going towards products from large corporate farms, and thus Monsanto.

    Functional Capitalism requires knowledge and choice. Where those are not available, the exploitation of workers or consumers is as much of a "Free Market" as an election in North Korea is "Democracy".

  • ||

    There is something I've never understood about Free Trade.
    Take China and Japan. Is it really Free Trade? Does the US have unlimited access to sell items in those countries? I'm pretty sure we do not. I don't see how that meets the Free part.

  • cost||

    Consumers would benefit from free trade, if the central bank allowed CPI prices to go lower in response to trade efficiencies. Under the printing press, CPI prices never go lower. Trade efficiencies are confiscated by the printers.

    That is, the bank confiscates trade and other productivity improvements, ans lends the confiscated goods back to the citizens who produced them. Bank executives pay themselves big bonuses, and citizens become debt slaves.

    Get rid of the printing press, and all consumers will benefit from free trade. Now, only the printers benefit.

  • ||

    "The evidence does not show that," Palmer said. "Multinational companies pay a wage premium. They pay more than local companies pay ... because they want to attract good workers. Look at the Shanghai factory of General Motors. They pay three times what Chinese-owned factories (pay)."

    http://www.bbc.co.uk/thread/blood-sweat-tshirts/
    http://www.nlcnet.org/

    There is abundant evidence showing precisely that. Jamming your fingers in your ears and singing "LALALALA" and being deliberately obtuse doesn't change that fact. Look, if you're a cold heartless bastard who doesn't give two shits if children/adults in third world countries are getting paid cents per hour to work upwards of 16 hour days, who are intimidated and threatened out of unionizing, to make crap for Americans to consume, then just admit it. Own up to it. Please don't insult the intelligence of other more compassionate people and belittle the suffering of these third world workers. It's not a good look.

  • sd||

    sd

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