Trade is an important issue that has appeared several times
recently in the Sun-Times. Below are ten
facts about trade that need to be part of any conversation about trade:
1) Taxes on
imports paid for most of our federal budget for most of our nation’s
existence. We didn’t even have an income
tax until 1916.
2) Jobs didn’t
leave the United States because corporate tax rates were too high. That came after the jobs left to help make up
for the lost revenue.
3) Jobs didn’t
leave our country because labor was cheaper overseas. It was always cheaper somewhere else.
4) Jobs left
our country when we stopped taxing imports.
5) We are told
that if we start taxing imports again, consumer prices will rise to pay for
those taxes. But those taxes will go to
the government. We could easily reduce
income taxes to compensate for that with no loss of revenue. See #1.
6) We are told
this will start a trade war, which will hurt our export industry. This wasn’t an issue for the 140 years before
we had an income tax, and this wasn’t an issue before we stopped taxing imports
and sent our jobs overseas.
7) We are told
that taxes on imports contributed to the Great Depression. Taxes on imports were raised after the
Depression began, which did hurt exports.
But taxes were raised everywhere else as well. And the government starting growing at a fast
pace, taking a lot of money out of people’s pockets. And nobody thinks that had anything to do
with prolonging the Depression?
7) Relying on
exports to strengthen or support our economy is bad economic policy. That would mean that we are relying on the
rest of the world doing well before we can.
They have to do well first to be able to buy our products. Why would we want to rely on other countries
for our own prosperity?
8) Relying on
exports ties all the world’s economies together such that problems elsewhere
hurt everybody else. Somebody somewhere is
always having problems. Relying on
exports is like the addicted gambler who believes that he will get lucky more
often than not.
9) Free trade
is like having a labor pool of 3 billion people. You can always find somebody who will work
for less, and this drives down wages for everybody.
10) When we made
all of our own stuff, we had good paying jobs for everybody, including the
millions of immigrants coming here. Now that
the jobs have left, we don’t have enough jobs for the people who are already
here, and wages keep going down.
You’re not going to solve our jobs problem by doing more of
the same thing that caused it in the first place.
