Questioning free trade, Part One

The debate over the future of America’s economy has boiled down to a question of government spending vs. tax cuts.

Both priorities, one favored by most Democrats, the other by most Republicans, assume that our economy needs a quick pulse of energy and confidence to put it back on its legs.

The troubling reality, of course, is that Americans simply don’t make things anymore that people want to buy.

The Chinese do that. And the Japanese and the Mexicans. The Canadians have a thriving manufacturing base, as do the Germans and the French.

But in this country, both political parties bought into the notion long ago that manual labor is either politically suspect (the anti-union Republican bias) or out-dated, dirty and unpleasant (the Democratic spin).

For all their philosophical disagreements, liberals and conservatives found consensus on one thing: “dirty-hands” work – from manufacturing to mining to milling – should be done somewhere else by somebody else.

We Americans will be the white-collar workers to the world, the thinkers and innovators and bean-counters.

The last few months, we’ve learned that economies don’t work this way. Our economy certainly doesn’t.

For one thing – Thomas Friedman’s fantasies notwithstanding -- we aren’t really a white-collar society.

A third of Americans never graduate from high school, a dismal success rate that has actually slipped in recent years.

Which means that for a quarter-century, we’ve pursued a “post-industrial” trade model that ignores the needs of six-out-of-ten workers.

Now even the supposed winners in the New Economy have been treated to the spectacle of corporations shipping their cubicle-and-creativity jobs overseas.

IBM has begun offering downsized American tech-workers a chance to keep earning a paycheck in India, or other developing countries, so long as they’re willing to “work on local terms and conditions.”

Maybe one day soon our economy will shuffle along on "remittances" sent home by expatriate cubicle slaves living in New Delhi and Jakarta.

While we’ve pursued a unilateral love affair with “free trade,” other countries have carefully protected their home industries.

From Europe to Canada to East Asia, politicians and industrialists use trade barriers, tariffs, subsidies and other market controls as a matter of course.

Those same countries openly court American corporations with the offer of extremely low-paid workers and dangerously lax environmental rules.

Which means that even the best shirt-makers in America are forced to compete with workers in Vietnam earning a few dollars a day.

A domestic steel plant competes with factories in Indonesia that are free to decimate rivers.

This ideological pipedream has created a “race to the bottom” global economy, every bit as destructive as the Neo-con fantasies that until recently drove our foreign policy.

The ultimate loser has been America’s working- and middle-classes, which have been pushed to the edge.

Until this year, the magnitude of the debacle was concealed by the finance and housing bubbles, and by the rapid expansion of government-sector employment.

The silver lining of this economic crisis is that it revealed just how rotten our industrial base has become.

It's also caused us to ask tough new questions about the pros and cons of "free" trade.

Tomorrow: Part 2, Is Free Trade part of a "Tyranny of Dead Ideas"?