Wednesday, January 21, 2004

Losing His Religion

It really is odd watching Lou Dobbs lose his religion. He's flailing around looking for a new one and he's mighty confused.

Seventy-six percent of consumers who look for U.S.-made products say that they have a hard time finding them, and the reason for this is simple: We've given away our manufacturing base through "free" trade. In 1951, the average U.S. trade tariff was approximately 15 percent. By 1979 the average industrial tariff had sunk to 5.7 percent, and now it is just under 3 percent. Most foreign importers enjoy nearly unrestricted access to the U.S. marketplace. As a result, Americans have become the world's greatest customers, with the country accumulating a trade deficit every year since 1976.


Amazingly, last week Federal Reserve Chairman Alan Greenspan referred to our record-high trade deficits as "seemingly uneventful." I assume Greenspan has heard of the boiling frog analogy, in which as the temperature rises to near boiling, all is seemingly uneventful for the ill-fated frog. But the Fed chairman evidently has no problem proclaiming the dangers of what he calls "clouds of emerging protectionism," apparently referring to a number of calls by members of Congress for this country to conduct fair trade and balanced trade. Those calls so concerned Greenspan that he said, "The costs of any new protectionist initiatives . . . could significantly erode the flexibility of the global economy."

Joining those members of Congress are Democratic presidential candidates: Reps. Richard Gephardt of Missouri and Dennis Kucinich of Ohio, Sens. John Kerry of Massachusetts and John Edwards of North Carolina, and former Vermont Gov. Howard Dean.

Trade has hardly become a central issue on the campaign trails, up to this point. But I suspect it is about to. America can no longer afford the price of "free" trade.

I'm basically a "free trader," but it's time we stop pretending it's that simple.