The Flawed Ideology of Free Trade Part four
Thursday, October 27, 2011
By Peter Crawford
Economy In Crisis.org
The sell-off of American companies is greatly rewarded by those doing the selling. Given record low capital gains taxes and other incentives, CEO’s and shareholders of major companies stand to gain immensely from the one-time bonus of selling their company at a massive premium to a foreign purchaser — far more than they would make by continuing to run them on a salary basis.
Countries like Japan, Germany and China take great pride in protecting their industries from foreign purchasers. They have government agencies devoted entirely to doing just that. In the U.S., we seem to do everything to encourage foreign takeovers. Of course, no politician likes being the bearer of bad news. Most politicians are not willing to risk their political careers by saying we must take drastic action to the short-term detriment of many Americans even though that is precisely what they are charged with doing.
Free trade is a convenient, well-packaged ideology that resonates well with consumers, and lines the pockets and ambitions of CEO’s and politicians. The result is that around 50 percent of all new cars now sold in this country are foreign. Our domestic auto manufacturers are consistently losing market share and teetering perpetually on default.
Today there exists a stigma in America that buying domestic is cheap, undesirable, of poor quality, and in poor taste. Clearly, the group that has been unquestionably damaged by free trade is the American industry in general. As a result, the American middle-class that relies on American industry for employment and opportunity is being destroyed and falling further and further into debt.
No rational argument exists to continue policy that leads to free trade agreements. These agreements are damaging America’s ability to compete, even as the results of free trade continue to provide cheap goods to American consumers. If we do not reverse this path of selling our assets and borrowing from foreign sources to finance our lifestyle of imports, we will eventually receive a call on all of our debt. At that point, we will find our cheap goods costing much more than we had ever imagined — and free trade will prove to be anything but free to the American consumer.
Click here to watch part one of this series, Part two, Part three, Part four
