Don Bourdeaux on Free Trade v. Protectionism
Watch this first so that you understand free trade versus protectionist trade.
Then read this. What the hell is Navarro crying about? He directed a really bad, horribly misleading propaganda piece called Death by China in 2013. And this from a university professor? From UCI, my alma mater no less. Sadly he seems to interview several economic idiots, starting off with a 63-year old gentleman named Tom Danjczek, President of Steel Manufacturers Association. Could you find a more invested guy on manufacturing than the president of a manufacturing association? I doubt it. But there are no specifics of how his bottom line is affected or how China undercuts American manufacturers. Americans, like most people around the globe, prefer, if they can get them, lower prices. Wal-Mart, for example, has low prices. Are you really going to shop at Sears or Macy’s or Nordstroms because they’re American and walk past savings in hundreds of dollars just to buy American? I mean think about what protectionist policies call for–they call for higher prices on consumer goods. Period. “Buy American” is a recipe for lowering our standard of living, not raising it. What this documentary does is encourage Americans to accept higher prices on goods from abroad.
The imagery, too, is terrible. It opens with a ball rolling into the front door of some Chinese factory, one colored by communism as though America and Americans are being eaten up by communism. China’s government may be communist, but their markets, the millions of markets, are more free-enterprise than our own. Where adolescents are cited in violation of city codes for selling lemonade for $0.25 on a neighborhood street corner, the Chinese set up shop almost anywhere unobstructed by city police.
The video makes a misleading statement, “57,000 American Factories Have Since Disappeared” following China’s 2001 entry into the World Trade Organization. So what? The 57,000 closures weren’t all due to Chinese competition. How about government regulation that closes factories. Not all companies flood overseas to China. They go to other states within the U.S.
Flooding the markets with illegaly subsidized exports? What the hell?
Then this, “More than 25 million Americans can’t find a decent job.” What? By decent, does he mean that Americans can’t find work that keeps up with inflation? Is this an argument to raise the minimum wage? For price inflation, take a look at the culpability of the Federal Reserve, not China. The Federal Reserve is the American agency that floods the market with cheap money and price distortion in the retail markets results. We should be thanking China, not condemning it.
Then Navarro interviews a teary-eyed college student but no mention as to what major the student earned his degree in. Nice omission, Navarro. Keep them rolling. Not all degrees pay. Cannot always follow your passion. Plus, there are cheaper ways of getting a degree that students are not told about. Does Navarro help these kids our or is he just using them to promote his own agenda? Ah, that was a rhetorical question.
But back to Navarro. He starts off with a trope:
Bombers, emblazoned with the words “illegal export subsidies”, cross the Pacific and drop bombs on US factories. A naval battery with barrels labelled “currency manipulation” joins the bombardment.
“The Chinese government has used these weapons of job destruction to launch a sustained and devastating attack on America’s factories and jobs,” intones Martin Sheen, the voiceover for the animation.
Ooh, exaggerate much? And by exaggerate, I mean lie.
Costs go up on goods due to regulation. Protectionism, which is what Navarro and his documentary calls for, only increases the cost. As Bob Wenzel says, “Navarro is a quack.” I would have said nutjob, but you get the point.
And why even concern ourselves with Navarro in the first place. Because that ol’ economic guru, Donald Trump, (and surely I gest) has selected him for the new National Trade Council in the White House. Scary stuff. I did not vote for Trump or for Hillary for that matter, but Trump will find a way to destroy this country’s wealth, not expand it. That’s too bad. Even though I did not vote for him, I was hopeful with some of his talking points, like 1) no nation building, 2) establish friendships with Russia, economic, cultural, and political friendships, and 3) he prefers trade over wars. Unfortunately, that position is not holding.
Thanks to Robert Wenzel at the EconomicPolicyJournal.