Where Does the TEA Party Stand on Trade?

September 3, 2011

As I was commenting on some editorial the other day, I began to wonder where the TEA Party stands on the issue of foreign trade.  The TEA Party has been extremely effective in driving the debate on debt and government spending.  If the TEA Party ever aspires to become a real force in American politics in general, it has to have a position on every issue, especially one as important to the American economy as trade.

So I visited their web site to learn more.  For starters, here’s how their banner reads:

FISCAL RESPONSIBILITY * LIMITED GOVERNMENT * FREE MARKET

Hmmm.  “Free Market.”  What does that mean?  Searching further on the site, here’s their explanation:

… we support a return to the free market principles on which this nation was founded and oppose government intervention into the operations of private business.

What exactly does this mean?  It sounds like it’s focused more on intervention in the market by the federal government.  But what about intervention by world government, which is exactly what the World Trade Organization does, stripping the U.S. of its right to set trade policy and manipulating international trade in favor of developing nations.  When the TEA Party says “… free market principles on which this nation was founded …,” does it understand that our founding fathers relied heavily on tariffs to protect our fledgling economy and build it into an industrial powerhouse?  Does it realize that “free market principles,” at least as they relate to “free trade,” didn’t even exist in the late 1700s when our nation was founded?  It wasn’t until 1812 that economist Ricardo came up with his “principle of comparative advantage,” laying the foundation for free trade theory.  And it wasn’t until 1947 that we were bamboozled by economists into giving it a try.

So I used their web site’s contact form to submit to them the following question:

I run a blog that’s dedicated to a new economic theory and its ramifications for trade policy.  I’m interested in learning the TEA Party’s stance on U.S. trade policy.  In its banner, the TEA Party champions “Free Markets.”  Does that apply only to government interference in markets or more broadly to international trade in general?  Does the TEA Party support America’s membership in and deference to the World Trade Organization, or does it support America’s right to set trade policy in its own best self-interest?

If the TEA Party supports U.S. membership in the WTO, then I’d like to understand how the TEA Party reconciles that stance with the fact that deficit spending is necessary to offset the negative consequences of a trade deficit?  Also, does the TEA Party believe that it’s possible to balance the federal budget while enduring a continuing trade deficit?

Thanks.  I look forward to your reply.

I hope I get a response.  I suspect that the TEA Party hasn’t really given foreign trade much thought.  If they did and if they came to realize that membership in the WTO is “government intervention” in the extreme, and that trade deficits only exacerbate deficit spending, I believe they could become a formidable force in the move to take back our right to manage trade in our own best self-interest.


The TEA Party: Changing Lanes or Heading in a New Direction?

October 3, 2010

Born from fear of health care reform and its likely implications for rising taxes and growing federal deficits, what began as a simple acronym for “taxed enough already” has morphed into the closest thing to a legitimate 3rd party that we’ve seen in many years. I say “legitimate” because there have always been many parties beyond the Republican and Democratic parties – the Libertarian Party and the Green Party, just to name a couple. But none has ever garnered enough support to be taken seriously, much less to have a real impact on an election.

On the surface, the TEA Party seems to be nothing new. The promise of lower taxes and less government spending has always had broad appeal, and it’s been the backbone of the Republican Party platform (often abandoned once in office) for decades. But there’s a deeper undercurrent that I’ve often heard in describing its constituents that I find intriguing. They increasingly see no difference between the Republican and Democratic parties. The Tea Party is attracting a growing throng of voters who’ve come to the realization that minor course corrections on a wrong heading still leave us headed in the wrong direction. They’re craving something big and new – something that will really make a difference in our slow-but-steady economic decline. There’s an opening here for a new political party big enough to sail a container ship through it. To the extent that the TEA Party can deliver the message that business as usual is over – that we’re ready to abandon the bankrupt ideologies of our two major parties, it’s serving a valuable purpose.

But if lower taxes, less government spending and smaller government is all the Tea Party brings to the table, it’s destined for the scrap heap of other failed political movements. After all, in the final analysis, there’s precious little difference between the economy of one nation with no taxes and no government spending compared to another that taxes its citizens at 100% and then returns all of the money to them through a massive welfare program. Each is left with virtually the same purchasing power. Tinkering with tax rates and spending isn’t going to make any real difference. And if “less government” is the key to prosperity, then how does one explain the fact that the economy of China, a communist regime with total control of every aspect of its economy, is the fastest growing in the world while America’s is in decline?

The problem isn’t that we tax a little too much or too little, or spend a bit more or less than we should. What does make a difference is trade policy. A nation with a large trade surplus (like China) can’t help but have a booming economy, while any economy that runs a long-term trade deficit (like the U.S.) is doomed to decline. We got off onto the wrong trade policy road a long time ago, in 1947, when the U.S. signed the Global Agreement on Tariffs and Trade – the forerunner of today’s World Trade Organziation. Is the TEA Party ready to go down a new road?

At the same time, we’ve been stuck on another road to ruin since our country’s inception, relying on exponential population growth to drive economic growth. We enjoyed the pretty scenery along that road for a long time but lately, as we’ve added to the labor force faster than their output can be absorbed, the view from that road has been turning uglier. It now looks like a dead end into an economic slum. Is the TEA Party ready for a new direction?

Send a message? Throw the bums out? Fine, I’m there. But if the TEA Party turns out to be nothing other than a left-to-right lane change on the road to ruin, then it’s a complete waste of time and its candidates will be exposed as nothing more than opportunists with nothing new to offer. Instead, let’s hope this hard swerve to the right is the first step in a three-point turn to reverse our direction and get back on the right road.