Does free trade contribute to our fiscal problems?

Most of our leaders, democrat and republican, are promoters of free trade.  However, I was wondering if delayed outcomes of free trade are responsible for diminishing our prosperity – for our current fiscal failures.

Do you believe that free trade contributes to outsourcing and loss of jobs in the United States?

Free trade agreements between nations provide that there will be NO tariffs or other impediments to the import/export of goods between nations.  Is “free trade” part of the global plan for redistribution of wealth around the world?  This appears to be the result, intended or not.

Here is an example of the way I see it:

Picture 10 barrels filled with water.  The water level of each barrel equates to the jobs and wage levels in each of 10 countries.  If each barrel remains separate from the others, with no interconnections, no pipes, the levels stay the same.  Relate this to jobs and wage levels in each country - jobs and wage levels will depend on individual nation’s economy and each individual nation’s efforts.

Now, suppose these 10 barrels are all interconnected with large diameter hoses.  There is no resistance to the flow of water between each of the 10 barrels.  What happens to the level of water in each of the 10 barrels?  The water level in the barrels with the highest levels will go down, and the water level in the barrels with the lower levels will increase.  It won’t take long for the water level in all 10 barrels to equalize – all reach the same level.  Now apply this to free trade among nations.  Given the free flow of trade and the cost of goods, won’t that tend to cause jobs and wage levels to equalize among nations?

Granted, there are other important variables:  Level of education, human, physical and natural resources in each country.  But all of these things can be moved around the planet to equalize even each of these factors.

What is the result?  Low wage, high unemployment nations will benefit.  High wage, low unemployment nations like the United States will suffer.    There will be downward pressure on wages in the US because it is cheaper to outsource what we used to do.  There will be a substantially reduced number of available jobs due to outsourcing which company after company are still doing. 

Free trade results in higher unemployment, lower wages and lower standard of living in countries formerly with lower unemployment higher wages and higher standard of living

Some economists argue that countries that focus on what they do best will still prosper, inspite of a large chunk of their jobs being sent overseas.  The US just has to focus on what we do best.  They argue that sufficient retraining of workers into more competitive jobs – jobs we do best - will solve the jobs problem.

But we have to ask.  Really, what jobs does the US do best?  What do we make better than anyone else?  What do we do best that is not done as well and for less money in Mexico, India, or China?  What will retraining our workers really accomplish if the new jobs result in lower salaries or still non-competitive jobs?  McDonald’s, anyone?

When we look at this picture we no longer have to wonder why unemployment is high and our nation is near fiscal bankruptcy.  Isn’t it obvious that a decade of free trade policies is now bearing fruit?  And that “fruit” is rotten for America.  It is the direct cause of sending tens of thousands of our best jobs to other countries where salaries are a fraction of our own – where environmental regulations are nearly non-existent.  That fruit is turning into fiscal chaos.

So, is “free trade” really the end all and be all of US trade policy?  Is it the magic pill for economic prosperity and a sustainable high standard of living?  Or is free trade a suicide pill for our nation’s economy.  Is free trade a tool of globalists and socialists to equalize the prosperity of this nation down to 2^nd or 3^rd world status over time?  As long as big government and big multi-national corporations continue to prosper, why should they care about our national sovereignty and prosperity?

Free trade does indeed appear to be an effective component of the “redistribution of wealth” scheme being promoted by the big players in the world.  Once middle America catches on, things will get interesting.  But for now most of us are caught up in the “free trade brings prosperity” deception. 

Sounds like the “hope and change” scheme of 2008.  How’s the “free trade” thing workin’ out for ya.