Free Trade vs. Fair Trade

free speech zone

(LFC Comment: Here is a opinion piece on Free Trade versus Fair Trade from our Knox County contributor.  The divide and conquer strategy mentioned in the article is definitely a communist technique meant to destroy our country.  Please note that this was written in 2016, and President Trump has initiated policies that are putting America first.)

Wall Street VS the American Worker

In days gone by Wall Street was the mirror by which you could gauge the American economy.

When Wall Street was doing well the American work force was rolling along. Factory workers could own a nice home, have two cars in the garage and the family could take a nice vacation. On top of that his children didn’t have to take out huge loans to go to college.  And believe it or not his wife may have been able to stay at home with the kids.

Companies were producing, workers were making money and stockholders knew all was right with the world. When Wall Street did well the American people did well.

Fast forward to 2016. Businesses are doing relatively well considering the sluggish recovery over the last 7 ½ years. Wall Street is doing well.  And the American worker is in trouble. Real wages have not increased in 18 years. The real unemployment rate is in the two-digit range, in the inner city it’s much worse, and there is no relief in sight.

So what has caused this dramatic shift in the well being of the average working class American?  First let’s separate the blue-collar workers from the white-collar workers as this distinction seems to be playing into the dynamic of the current presidential election. The Democrats seem to be tying the lower-class blue color worker with a Trump vote. The insinuation is the uneducated and by inference the uninformed laborers are voting for Trump. This also infers that the smarter more educated people in the workforce should vote for Hillary.

The masters of division strike once again. The all-inclusive Democratic Party that has divided the American people into a cornucopia of opposing groups seems to have found a new opportunity to divide us further. First it was White against Black, then women against men, then gay against straight, legal immigrants against illegal immigrants. The list goes on. The more we are brought together under their banner the more America is divided. The old saying comes to mind, “often wrong but never in doubt”. They do it because it gets them votes. All self-perceived victims need someone to champion their cause. Solve the problem and there is no longer a need for a champion. Hence, they deal with symptoms not solutions.

But I digress. So what has happened to cause this disconnect between Wall Street and the American worker, especially the Blue Collar workers?

It’s called FREE TRADE. It started with the North American Free Trade Agreement, better known as NAFTA. This agreement was supposed to open the door to more companies moving to Mexico and also to remove barriers to trade between Mexico, Canada and the US. So if NAFTA was so successful in creating new jobs in Mexico why do we have their workers streaming across our boarders to find jobs? The truth is when the walls came down to allow American companies to relocate overseas; South East Asia looked like a much better opportunity to make profit than Mexico. The Stock holders would make more money and the CEO’s would get bigger salaries and bonuses. How does an American worker who makes a living wage compete with someone in South East Asia who makes $.50 an hour? The answer is they don’t. The small business can’t afford to go overseas but the big guys can. So why are we destroying our middle class with free trade?  It’s called Crony Capitalism.  Let’s look at the realities of production. The American company is hamstrung with a myriad set of regulations and taxes that increases the cost of production.

Companies in foreign countries that have none of these handicaps have a leg up on their American competitors. Not to mention the disproportionate wage levels. The U.S. company is placed at a huge disadvantage. We have a global wage race to the bottom. In the free trade world the transfer of wealth from the western economies to the areas of the world where most people live in poverty is a given.  Its global socialism driven by western business separating its national interests for more personal gain.

When crony capitalism is in play the profits from trillions of dollars to the east does not translate to the workers doing better. The ones who benefit are the companies and the politicians on both ends of the transaction. The people see very little of the wealth. So, we see Wall Street doing fine while the American worker loses a good job and is forced to get a job at McDonalds. The middle class keeps getting smaller and no one claims to know why.

So how do we correct this disparity? First, we have to reduce our corporate income tax rate. We are currently at 35%, the highest in the industrialized world. We should replace this with a graduated corporate tax rate. If all of a company’s workers are in the U.S. the tax rate is zero or close to it. If all of the company’s workers are outside the U.S. the rate stays at 35%. Graduate the rate based on percentage of overseas employees versus. employees in the United States. Second, eliminate all legislation targeted to give certain company’s tax breaks other companies cannot get. Currently General Electric Corporation pays no corporate taxes because of this kind of legislation. Place tariffs on imported goods based on the administrative overhead attached to producing a product. Example: if a product made here has admin costs based on adherence to EPA rules and other government regulations, and a foreign company has no such restrictions the tariff should reflect these differences in costs. This is called Fair Trade.



Categories: Free Speech Zone, Uncategorized

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