Wednesday, November 3, 2010

Protectionism, free trade, buy American

Please read this post in conjunction with my basic position paper "What is this blog all about?"

Unfortunately, if public figures make a given statement enough times, a major portion of the population will come to accept and believe it. 

One hundred or more years of repetition (brainwashing), have created the following simplistic word associations:

Liberal = bad

Socialism = bad

Protectionism = bad

Free trade = good

However the fact is that too much or too little of anything is BAD, and there is an intermediate position which is GOOD.. 

If we say protectionism is bad, and we therefore reduce and reduce the amount of protectionism, to the point where our economy is wrecked, we have gone too far.  In this case, some increased amount of protectionism becomes GOOD.

"Free trade" sounds good because the word "free" is in there.  But, again, too much free trade, to the point where our economy is wrecked, is BAD.  

Many more examples could be given.

People may dismiss my blog as that old chestnut "Buy American".

Yes, there have been "Buy American" campaigns over the years.  These campaigns were on the right track.  If large numbers of people had supported these campaigns, we would not be in the big mess we are in today.  However, with little public interest, the campaigns died away.

Now in 2010, things have gone to the point where most Americans, probably at least 80%, recognize that the employment situation is disastrous.  All we need is a respected public figure to lead on the issue.  With proper leadership, we could get at least a good portion of the jobs back from China and other foreign countries ourselves, without waiting for the government to act. 

In any case, the government will never act effectively.  The government is too careful, too politically correct, to risk annoying China.  But if a good case can be made that China is keeping its currency artificially low, and if China refuses to act, then we would be justified in putting a 25% tariff on everything coming in from China.  This action would have two good effects:

+  Provide additional tax revenue to the government - badly needed!

+  Provide a breathing space for American entrepreneurs to start or re-start factories, and for existing American factories to see increased orders.

A small increase in manufacturing in America would lead to a small increase in manufacturing employment.  A small increase in employment would raise hopes of people and they would buy in stores.  Increased store sales of American-made goods would lead to increased manufacturing activity and employment.  The process would go around and around with increasing benefits to the economy and to the American people.

It can happen.  It can be done.  Let's do it!.

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