Free Trade Within

Deflation, falling prices, is what defined the Great Depression. As prices fell, wages fell. Investment contracted with contracting returns. When the prices of goods couldn't cover their costs, jobs disappeared. Consumers without jobs couldn't consume. And animal spirits suffered.



Is it really a good time for America to pursue new bipartisan trade agreements--agreements that would further harmonize our economy with large markets like Japan and Europe where deflation is resurgent and menacing? Already deflation is contagious: American median household income is down $5,000 since 2007 and American consumer prices began to fall in December. Does deflation here really need encouragement in new trade agreements?



Is it really a good time for America to pursue new bipartisan trade agreements when external (ie. trade agreements) and internal disincentives (ie. regulation and uncertainty) to entrepreneurship already destroy about 100,000, or two percent, of America's private businesses each year according to Gallup and when young entrepreneurs are already an endangered species according to the Wall Street Journal and when small businesses still account for about two-thirds of net new jobs? As companies close, there is less competition for workers, which depresses wages. Does this deflationary trend need encouragement in new trade agreements?



In an increasingly desperate and deflationary world, why do we expect American small businesses to compete with companies that don't have to compete with American regulations (ie. the necessity to provide health insurance to their employees and the liability of withholding and remitting payroll taxes to government)? Why do we expect American workers to compete with workers who do not have to pay for the same social insurance schemes or public education programs or environmental protections? The company and worker who does not have these costs will be cheaper and more competitive to the end consumer. And the American worker, "protected" by a nanny state, will be less employed than his overseas counterpart.



Let's free trade within our borders. Otherwise, free trade is just mercantilism against everyday Americans--a run on our nation's dwindling resources by international capitalists encouraged by our policy makers--a run on our nation's dwindling resources which leaves us captive and impoverished (ie. selling personal services to each other to buy our manufactures overseas).



Let's free trade within our borders. Otherwise, free trade imports the labor of aliens to support the consumption of retirees while laborers in America are excluded from economic exchange. This would cause dangerous divisions in American society especially in a deflationary environment. Would a leader working to conserve his country pursue such a policy in the present?



It's time for American policy makers to compete with their counterparts overseas: a fair trade
agreement would equalize by reductions the wages, benefits, and pensions of administrators in the US with those of their counterparts in Mexico. A parity of regulatory costs would reduce the disparate burden on American companies and workers competing in the NAFTA and the proposed Trans-Pacific Partnership markets. This would make American goods cheaper in America and Mexico. Regulators, whose consumption is curtailed in the short-term, could be retrained to do productive work.