Tuesday, September 25, 2012

Free Trade Agreements Are For Suckers

By, Chris Rossini
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Check out this ad from the Economic Dream Team known as Romney/Ryan:

You can file this ad under the "pro-growth policies" section of Republican rhetoric.

Unfortunately, this type of thinking tricks innocent people who (rightfully) support free markets. It turns such people into giant suckers.

Here's why:

Free trade and free markets occur without government involvement!

If I exchange my basketball for your football, that's a trade --- No government involvement.

If I exchange $10 for your football, that's a trade --- No government involvement.

Whether we live in the same city, state or country makes no difference whatsoever. We exchange without a third party sticking its nose in our business.

When government sticks its giant honker in, the transaction immediately becomes a managed trade.

Free Trade agreements are a crony capitalist's dream. They are a product of corporatism.

With politicians in their pockets, the well-connected can setup some nice arrangements for themselves. Often these agreements run thousands of pages long, and contain unbelievable amounts of minutia.

The Romney ad contains a big lie. There are no nations that are "committed to free enterprise and open markets." If there were, there would be no need for free trade agreements. The governments would simply say "We don't involve ourselves in economic exchanges. People exchange without our interference."

That doesn't exist, and Romney/Ryan have no intention of that ever existing in the U.S.

Don't be a sucker.


  1. Very important point by Mr. Rossini. Even young children are learning this in countless states when they are prevented from running a lemonade stand. The default of the U.S. is coming, Romney or not, and hopefully it will enable a rebirth of natural exchange with any money millions choose. People are recognizing the importance of gold and silver, even if they're not buying it.

  2. The ad completely contradicts Romney's position on China. Romney says he wants prosecuter China under the WTO agreement for manipulating its currency downward to hurt US exports. That's the really big lie. The renmimbi has risen about 30% against the dollar in the last decade. They may be manipulating their currency downward, but not as fast as we are.

    Romney wants to have it both ways. (Not a rare trait in a politician). He wants to preach free trade and protectionism at one and the same time.

    Unfortunately, he's got his economics wrong too. The dollar's decline against China's currency has hurt the American economy, not helped it. Chinese goods, or their American substitutes that we're supposed to be promoting, now cost us more than when the dollar was strong. Monetary inflation is no better for our foreign trade situation than it is for the domestic economy.