It is absolutely stunning that virtually no one (the media, the experts, or the politicians) is talking about the real reason why America cannot create jobs: Free trade with China. Free trade advocates promised us twenty or thirty years ago that free trade would be the engine of economic growth, and that it would make everyone on both sides of the trading route prosperous. Well, it surely has made China prosperous, but not the USA. USA factories cannot compete with Chinese manufacturers and therefore have had to shut down while cheap Chinese imports flood the United States and suck trillions of dollars of wealth from our economy. The Chinese currently have in excess of $3 Trillion in foreign currency reserves that they are just holding over there, while we’re in deep debt.
Some say there is nothing we can do, while others say even if we do something, it will only make matters worse. Both of these groups are wrong. Here is the basic question: How did the United States prosper for two hundred years without the free trade agreements that we have now? We became a giant superpower without any free trade agreements. We prospered and built up a huge economic machine that had never been seen in the history of the world. No, the USA would not come to an end if we renegotiate these stupid trade agreements. We have to stop allowing the free trade advocates to mislead us and confuse us.
The main argument against restricting Chinese imports is that it will make consumer goods more expensive for Americans. Yes it will, that’s a fact, and I will not argue with that. But what I will argue with is the assumption that higher prices is necessarily a bad thing. Americans waste too much. We import tons of stuff from China and because it is cheap we don’t value and take care of what we buy from the stores. Go to Wal-Mart on any given day and see how people load their carts up with stuff. And then take a drive by in a middle class neighborhood on any given trash collection day and take a look at the stuff being put out as garbage. People are also donating tons and tons of used clothing to Charity, having worn them a few times and can afford to buy more because they are so cheap. Whatever happened to notion of taking care of stuff? We have become a society that has to constantly have new stuff, and we’re paying the price for it. We can no longer afford it, and we can no longer afford the consequences that it brings – high unemployment, huge trade deficits, economic stagnation, and social instability.
American needs to get back to manufacturing. Making things is the basis of human prosperity, and any society that ceases to make things, will run into economic problems. We cannot prosper by just being a “high-tech” or “financial” nation. We need to produce more of the stuff we consume. This unbridled importation of stuff will continue to drain resources away from the USA. We need to gradually impose quotas and implement modest tariffs on selected commodities coming from China. We cannot do it in a rash manner because it will likely cause shocks to both the domestic economy and the global economy; it has to be done slowly and gradually, probably over a ten-year period.