John McCain met with voters and automotive employees here in Southeast Michigan yesterday and what he had to say was so outrageous that I wanted to put my foot through the radio in my dashboard as I listened. This article hits the high-lights, but misses the one statement he made that really got my dander up. His comment, which you won’t read here in this article (nor was it picked up in any other national media), was that “protectionism and protectionist trade policies have been a failure whenever they’ve been tried.”
Only someone who has been misinformed, is a fool or a liar – or someone with all of those traits in varying degrees – would say such a thing. The fact is that the U.S. relied heavily upon tariffs for the first 173 years of our history, from the founding of our nation in 1776 until signing the Global Agreement on Tariffs and Trade in 1947. Thanks to the protection afforded our domestic industries by that trade policy, the U.S. built itself into the world’s preeminent industrial power – the wealthiest nation on earth and the envy of every other nation. In fact, tariffs provided all of our federal revenue for 132 years until the first income tax was implemented in 1908. In the 61 years since signing GATT, we now stand on the verge of economic collapse.
Another example: early in the administration of George W. Bush, believe it or not, he imposed tariffs on foreign steel to protect what little domestic steel industry was left. It was hugely successful and saved that last vestige of our steel industry.
Another example: read about what recently happened to our last maker of wire coat hangers when tariffs were applied on imports being “dumped” in the U.S. by China. (Click here.)
And if protectionist trade policies don’t work, why does the World Trade Organization actually use such policies to protect the economies of two-thirds of its member states?
My wife and I had a discussion about this this morning. She said, “I think McCain truly wants to do what’s best for this country. The problem is his advisors. They’re the ones telling him things like this.” My reply was “The problem is that the man in charge has to be the smartest one on the team. He has to have a good grasp of what is happening. Otherwise, he can’t possibly select good advisors. He’ll just pick advisors recommended by someone else that he trusts, whether that person is giving him good advice or not.”
This is the problem with McCain. In spite of his decades of service as a U.S. Senator, he has admitted to knowing very little about the economy or economics. And it shows. What does this say about the man? It says that he’s an intellectual light-weight, someone with a remarkably low level of curiosity or thirst for knowledge. If you were a U.S. senator for that long, wouldn’t you want to know everything you could about something as important as the economy? Don’t you think that’s enough time for anyone with even a mediocre intellect to learn a lot about the economy and economics?
He’s someone who accepts things that he’s told unquestioningly and never does any of his own probing. He never asks the question “Why?” “Why is our economy in such trouble? Why are we running such a huge, persistent trade deficit? Why are Americans’ real incomes declining? Why are American assets being sold off at such a furious pace?” He doesn’t have the intellectual curiosity to ask himself, “If economists are so smart, why is our economy such a train wreck? What if everything they’re telling us is wrong?”
No, not McCain. His approach to government is clear. He will assemble a group of what are considered to be the most knowledgeable people from the ranks of Republicans and conservatives and follow their advice. He will place all of his faith in the now arcane “trickle down” economics of lowering taxes on the wealthy, with the expectation that the money will trickle down through the economy, not realizing that the world has changed in the twenty years since Reagan. “Trickle down” no longer exists. It has been replaced by “trickle out.” Money saved by the wealthy through lower tax rates is now invested overseas and spent on foreign luxury items.
There was a time when I admired McCain and his “straight talk.” But I’ve come to realize that straight talk about beliefs, no matter how heartfelt, if based on hearsay instead of critical analysis and sound judgment, sounds an awful lot like the utterances of a fool or an outright liar.
I’ll close with just a couple of comments about high-lights from the article:
… Despite reservations by some in the audience who have been hurt by free trade practices, McCain said: “I also have to look you straight in the eye and tell you that I do believe in free trade.”
McCain talked about the need for energy-saving technology, lower taxes and better education.
Taxes are already at historically low levels and our economy has gotten much worse. And it makes my blood boil every time I hear another politician emphasize education when talking about jobs. They are essentially telling us that we’re failing in the global economy because we’re too stupid. Yet, they never explain why every high school kid in the world is competing for enrollment in American universities. Nor do they explain what jobs are going unfilled in the U.S. because there are no well-educated Americans to fill those jobs.
Jim Zawacki, chairman of GR Spring & Stamping Inc in Grand Rapids, said free trade is hurting his business.
“It hurts us suppliers, there are more employees in the small businesses…and we cater to the multinationals,” Zawacki, 65, said. “You say, ‘fair trade, free trade.’ So many things have gone wrong with the Chinese.”
McCain responded that innovation and talent in America still wins out in free trade issues.
“I think the problems we face in America can be fixed by unleashing the entrepreneurship,” he said. “I think we’ve got the most productive and innovative workers in America. And I’m not afraid of competition.”
I’m sure Mr. Zawacki wondered “Is this guy even listening to me? Does he hear what I just said? I just told him that our trade policy is killing us and he responds with ‘… innovation and talent still wins out in free trade issues? Is he calling me and my company ‘un-innovative’ and ‘untalented?’ Is he saying that an ‘entrepreneur’ could do a better job than I and my company?”
The problem isn’t “competition,” Mr. McCain. The problem is giving away free access to our market without getting access to an equivalent market in return. We’ve been listening to this “America isn’t afraid to compete” crap for decades and regardless of how much we reduce costs and improve quality and productivity – in other words, regardless of how hard we compete – things only get worse. Why is that, John? Ask yourself, “Why?”