Ignore the Hillary/Obama charades: NAFTA is good.

hillary and obaaaaaaaaama

Marketplace painted a nice picture of Obama and Hillary’s voracious battle for the crown of ultimate NAFTA hater.

This is frustrating. Yes, they’re in Ohio. Yes, they have to cater to the lowest common denominator.

Instead, they should rise up above the normal crap and say, “Look America, NAFTA is here. I (didn’t support it/didn’t agree with my husband), but it’s not going anywhere soon. But, I *DO* support free, government supported retraining programs to help displaced persons find jobs. This is a *REAL* way that, if elected, my administration would work toward a solution for Ohio and American citizens that were hardest hit by NAFTA.”

Please remember: NAFTA is not bad. Free trade is not bad. But, free trade often displaces labor that is most easily displaced — which is most often low/unskilled labor.

Our government must recognize that the effects of free trade often hits hardest our lowest income members of society. As such, our government has a strong social duty to provide free retraining and placement programs for those displaced by trade.

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6 Responses to Ignore the Hillary/Obama charades: NAFTA is good.

  1. craftlessculture says:

    I think “free retraining and placement programs” would not be an option for the government under a true “free market.” Because that would require that companies pay the taxes that they owe to support such training. It also implies that job training will lead to job security which I would argue is a fallacy.

  2. kfarr says:

    @craftlessculture: I know, my beliefs seem at odds with each other. But, a responsible government uses the market when appropriate, such as the provision of most everyday goods and services for its citizens; and, it uses taxation and mandate for societal functions not served appropriately by a market, such as education, health care or fire protection.

    You’re right, retraining and placement would not be considered pure free market. You’re also right, I imply that freely available, high quality job retraining increases job security. Specifically, effective retraining would increase the chance of a displaced worker finding another job, decrease the amount of time required to do so, and increase the pay of the displaced worker. Of course, the keyword is ‘effective’ training. Our government doesn’t have great track records implementing such programs.

    I believe:
    1. Free trade greatly increases societal well-being.
    2. Allowing free trade has short-term consequences for a small subset of society: displaced workers. Often these displaced workers are low-income and have few resources to deal with major career changes.
    3. Restricting free trade has long-term consequences for all of society: sluggish economic growth (lower well-being).
    4. We make some sort of decision: restrict free trade (hurting all of society in the long run) or allow free trade (hurting a smaller subset of society in the near future). I strongly believe it is better for all of society to allow free trade.
    5. Given the decision to allow free trade, and considering that nearly all of society benefits from free trade, it is our moral responsibility to use a small portion of these benefits to aid the small subset of the population that is hurt by free trade in the short run.

  3. rzu says:

    kfarr: You ignore that so-called “free” trade is funded by cheap oil. It makes sense now to import manufactured goods from China and bottled water from Fiji and produce from Chile and New Zealand because we aren’t paying the real costs associated with moving these products to our markets. Start factoring in our subsides to oil companies and the US’s enormous defense budget and these imports start looking a lot less attractive. Once we further factor in other externalities such as pollution and climate change you have a much harder time making the point that “nearly all of society benefits” from free trade.

    Another problem with your point of view is that it assumes that the current system has placed the correct values on labor and capital. I would argue that it tends to skew towards an undervaluing labor and overvaluing capital. In a strict economic sense, capital is the accumulation of labor, but with the concentration of wealth in the hands of an ever-smaller number of (very powerful) people, that fact seems to be glossed over. Labor is treated as expendable and any profits are scooped up by the owners of capital. Treating labor like any other raw material is the only reason it makes sense to import nearly everything we use in our daily lives. But labor isn’t just a raw material. We are labor! And society is not well served by having people treated like beasts of burden, nor is it well served by having a large gap between the haves and the have-nots.

    Finally, and I’m not sure I agree 100% with this one, it has been pointed out that the American service economy only works while it is expanding. If the economy were to contract, we would no longer need that additional sales clerk at Best Buy to tell us which gadget to buy, and she would no longer be able to afford the day care worker to watch her kids, and the day care worker would not spring for the deluxe wax job for his car, and the whole economy would come down like the house of cards that it is. If Americans were still growing their own food and manufacturing their own gadgets, we’d still be able to get by, but without the skills to ensure our own survival, we’d be screwed.

  4. craftlessculture says:

    I would also argue that “slower” growth is not the same things as “sluggish” growth. a CD bought at the bank is going to be sluggish growth, but there’s more security in it. I’m still not sure how restricting free trade hurts society in the long run. Unless it were coupled with strict nationalization to allow the cost of living to be maintained at a feasible rate.

  5. kfarr says:

    @razu:

    I think the term ‘free trade’ limits my thinking. Let’s take that out for a second and, perhaps, we believe in the same things.

    I agree that there are important social considerations that manifest themselves with trade. You mentioned energy, labor and national security.
    – I agree, energy prices may not correctly reflect their cost (literal cost and external costs from pollution, etc).
    – I also agree, our government and society may not properly value labor vs. capital.
    – If I understand the last point correctly, you’re emphasizing national security re: ensuring domestically produced ‘core’ products and services like food. To an extent, I agree with that.

    So what are the solutions?
    – Properly price energy, for example, reduce kickbacks for oil, increase cost to match estimates of external cost of energy consumption. Trade will automatically adjust to reflect energy costs.
    – Tax capital gains more? Take from the rich and give to the poor? I don’t know enough to suggest solutions for this. But, trade would adjust to reflect a revaluation of labor vs. capital gains.
    – Farm subsidies. I don’t like the sound of that, since most existing subsidies are poorly executed and favor small interest groups, but to a degree it could be prudent to ensure domestic production. Trade would automatically adjust to reflect these subsidies.

    So, I’ll take back my point from the original post, perhaps I’m not for pure ‘free trade’. A free trader would definitely not favor farm subsidies.

    Here’s my beef: the real issues above are related to energy pricing, labor, and farm incentives. So let’s attack energy pricing, labor and farm incentives. Adjusting trade policies IS a part of that pie, but not by any means a beginning or end solution.

  6. Abel says:

    I just don’t get where you live, but it can’t be the United States NAFTA is good to those who own companies and inport foreign products in to sell to us the American worker who just lost his job because his company just moved his job to India. And you say donot listen to Hilary or Obama i beg to differ its you we should not listen to you have not lost your job, we have over 50,000 in Michigan alone to Nafta here i would love to see maybe one day you losing your to Nafta and see how you feel. Don’t tell us its a charade because were living it now man, its no charade!!!!!!!!

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