Tuesday, October 9, 2012

The Great Betrayal 2

There were a variety of points that Pat Buchanan made in my latest reading of The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy:

----Buchanan argues that Japan's economic miracle in the 1960's was due to its protectionist policies, as Japan allowed for domestic development by shielding it from foreign competition.  That may be so, but, the way Buchanan tells it, Japan still had some interaction with other countries prior to the economic miracle in the 1960's.  Japan imported from the U.S. "mineral fuels and animal and vegetable products", while also exporting a lot (page 31).  Could that have set the stage for the economic miracle, by providing Japan with wealth and capital?

----Buchanan believes that there was a negative aftermath to President John F. Kennedy's free-trade policies: a reduction in "America's share of world industrial exports", even as Europe's share was rising; trade deficits; and a decline in American industries, such as radio- and TV-manufacturing, antifriction-bearings, machine-tools, and American automobiles.  Buchanan narrates that a number of Republicans supported Kennedy's free-trade policies (except for some stalwarts, like Barry Goldwater), and yet there were many politicians who later wanted a quota system to offset their negative consequences.  But President Lyndon Johnson said no.

----In the same way that Edward Gresser in Freedom from Want sought to argue that free trade should be embraced by liberals because it's a liberal value, conservative Pat Buchanan seeks to demonstrate that protectionism is something that has been supported by prominent conservatives.  Buchanan acknowledges that President Ronald Reagan pursued free-trade policies----with the shoe industry, for example----and the result of that was a decline in the American shoe industry.  But Buchanan notes that Reagan was concerned about the impact of free trade on American workers prior to his conversion to free trade, and that Reagan as President pursued protectionist policies that protected Harley-Davidson and imposed quotas on the import of Japanese cars, resulting in a resurgence of the American automobile industry.

----Like Gresser, Buchanan looks at the trade policies of America's founding fathers.  Buchanan notes that America in her early days could have followed the free trade Gospel by sticking with what she was good at----growing tobacco and other products----while importing things that other countries were good at----products from manufacturing.  Instead, she built her own manufacturing base, one reason being that she wanted for America to be self-sufficient in terms of developing her own military supplies.  And she did not hesitate to use tariffs.  When British ships were "dumping goods in U.S. ports to kill the industries begun during the War of 1812...Madison imposed a protective tariff" (page 52).

----Buchanan argues that "free trade" policies in their current form are neither consistent with the free market, nor are they fair.  In the aftermath of Kennedy's policies, Europe and Japan had tariffs that inhibited U.S. exports from making the same gains that they themselves were making.  There are countries in which the government actually gives their businesses an advantage by subsidizing them, which is not a free market.  And there are countries that devalue their own currency, which results in a trade deficit by making our goods in their countries more expensive, even as their goods in our countries somehow become cheaper.  (But I don't know how their devaluation of their currency makes their goods cheaper in our countries.)

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