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Obama: "Abandon our economy!"

By Larry Eubank
web posted February 7, 2011

ProtestRight-thinkers both inside and outside the current administration agree, we need more NAFTA-type trade agreements.

"Kill the economy!"

The Wall Street Journal recently published an opinion piece on that subject. The article,  "Obama's Free Trade Opportunity," by Thomas McLarty and Nelson Cunningham (January 24, 2011), claimed that a full-throated campaign for passage of the Korea, Colombia and Panama agreements can help reset this presidency.

In other words, what this administration needs is even more NAFTA-style agreements, even more off-shoring, and even more abandonment of our industrial productivity. In effect, McLarty and Cunningham say, "Let's divest from ourselves."

Obama subscribes to the same delusion. He said in his State of the Union address that he supports the proposed new trade deals – thus proving he has no idea of the true state of our nation's economy, and no clue as to what to do about it. His remarks included:

Last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor; Democrats and Republicans, and I ask this Congress to pass it as soon as possible.

Clueless on the economy.

What does that amorphous phrase, "will support 70,000 jobs" mean? It certainly doesn't mean "will create 70,000 jobs." Every free trade agreement we have signed so far has resulted in more disinvestment from our economy, more investment of our productive capital abroad, and more jobs transferred from our country to others.

And contrary to Obama's assertion, union people can see what's going on; they are very leery of the new trade deal, as this story indicates:

[S]ome powerful labor unions are already lining up against the deal, fearful it amounts to an invitation to employers to move jobs overseas.

The AFL-CIO, United Steelworkers, International Association of Machinists and Communications Workers of America all said Thursday they intend to oppose the agreement, which would gradually knock down tariffs and other barriers to trade between the two countries.

(Besides the Korea agreement, Obama is also in favor of the Colombia and Panama agreements. After all, it never hurts to have plenty of places where U.S. companies can off-shore their manufacturing, does it?)

There's a common folk saying, that insanity can be defined as doing the same thing over and over again while expecting different results. By that standard, McLarty, Cunningham, and all "free-trade deal" touts and advocates are insane. They want even more of what has pushed us as a country into bankruptcy and subservience. For them, it's not enough that we owe everything but our underwear to China; they want to enable further off-shoring, to Korea, Colombia and Panama.

In his speech, Obama expounded once again the hare-brained theory behind NAFTA-style pacts, showing no recognition of the devastation that has resulted from such deals. He said:

[T]he more we export, the more jobs we create at home. Already, our exports are up. . . . Recently, we signed agreements with India and China that will support more than 250,000 jobs in the United States.

Theoretically (relying on a very sophomoric and abstract theory), his supposition on exports might be correct. By the terms of a superficial, one-dimensional understanding of economics, having more exports (all other considerations being equal) means more jobs.

In that regard, NAFTA-like treaties supposedly make it easier for us to sell our goods in third-world countries; that is the glittering promise we have been touted on, time after time. But what such treaties really do is make it easier for goods produced at third-world wage rates to enter this country, unhindered by tariffs or other barriers. Those goods then undercut the price of goods produced here. As a result, our producers have to "off-shore," meaning they have to shift their production to third-world countries, where they can also produce at third-world wage rates and thus sell here at competitive prices. Our companies must produce goods in the same low-wage environments other producers use. They must produce there, in order to sell here. As a result, the supposed "free trade" policies liberals tout are actually "total disinvestment from our economy" policies.

But if all the goods are produced there, where do we get the money to buy them here? Are we as a nation supposed to live completely on debt? Are we supposed to build an economy based on taking in one another's laundry — the famed, mythical "service economy" the clever boys once touted?

"What got us here will keep us here" — "here" being on the road to complete economic collapse. Off-shoring has denuded our industrial landscape. The prosperity and manufacturing capability our ancestors built up over 200 years of hard work and investment — the machinery that once made us the "arsenal of democracy" — was thrown away within a matter of a couple of decades, so that clever boys like McLarty and Cunningham, and clueless individuals like Obama, could prove their high-mindedness and their economic brilliance. ESR

This is Larry Eubank's first contribution to Enter Stage Right. His web site can be found at http://www.larryeubank.com/ © 2011

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