Harold Myerson has an interesting column today in the Washington Post, entitled "Rethinking Trade". It is a subject which is very much front and center in our current economic crisis, or it should be.
I am no economist, but it takes no great acumen to realize that our trade relationship with China has long been problematic, if not disastrous.
http://www.washingtonpost.com/...
A few months ago, Robert Cassidy found himself pondering whether trade actually benefited the American economy. "I couldn't prove it," he says. "Did it benefit U.S. multinational corporations? Yes. But I cannot prove that it benefits the economy."
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The debate about the stimulus package before Congress has helped expose the huge rift between our national interest and that of our globalized business sector. Last week, the House Appropriations Committee voted almost unanimously to require the use of U.S.-made steel in the infrastructure projects included in the stimulus, unless the U.S. industry -- which is running at 43 percent of capacity -- was unable to supply it. You might think that American business, beyond the steel industry, would welcome such language, but, in fact, using Americans' tax dollars to stimulate American production looks like the last thing globalized American business wants. A letter opposing "Buy American" provisions in the stimulus has been signed by the U.S. Chamber of Commerce, the Business Roundtable and several other such groups.
It was bad enough when our banks and corporations decided to take their funds out of American manufacturing to promote low-wage production in China. Now they want to direct the tax dollars behind the stimulus program to the same end.
The only mystery here is why the Chamber and the Roundtable aren't compelled to register as foreign lobbyists. Of all the terms we could use to describe them, "American" certainly does not spring to mind.
It seems telling that the Chinese leadership seems very leery of the Obama administration. They censored part of his inaugural address, and have telegraphed their nervousness. They were very happy with the Bush (and yes, Clinton) administrations. "Normalizing" trade relations with China was sold as a way to boost American exports. Instead, it meant a massive shift of manufacturing to China, and currency manipulation by China to assure that American manufactured goods could not penetrate the Chinese markets. China also financed our trade deficit, so that we could keep on buying their goods.
Our exports to them consist, mostly, of raw goods . Adam Smith, in his advocacy of mercantilism, said that a colonial relationship should exploit raw materials from the colonies, and re-export them as finished goods.
So, have we become a colony of China? A great many underdeveloped nations are falling under their sway, particularly in Africa. Certainly, one could argue that the United States has become an underdeveloped country, as our manufacturing sector rapidly contracts.