Fair Trade - More Liberal Mumbo Jumbo
Liberals now talk about fair trade. The word "fair" is so overused it has lost any meaning it ever had. That makes it a great word for liberals because they can use it for whatever they want. It doesn't have to mean anything and that fits well with most of what liberals rant about. Don't worry - I'll get to the conservatives in a little while.
Since it has no meaning, it is mainly used to impose restrictions on trade from other countries. These countries are almost always poorer than we are. Apparently liberals in American want to protect poor people in other countries from the dangers of working to earn money.
But let's get more into it. I searched Google for "fair trade" and came up with this site: http://www.fairtradefederation.org/
There are some great bits on this site. For example:
So the first part of fair trade is that workers are paid fair wages. And fair wages are "at least" the minimum wage. This doesn't even make sense. If there is a minimum wage, workers can't be paid less than that amount anyway. So that one's meaningless. But now we're not satisfied with minimum wage anymore, so "whenever feasible" they get a "living wage."
Um, who decides when it's feasible? And what's "living wage" anyway? if the wage they're getting is not a living wage, then presumably the workers die. That's not good business for an employer, so the employer will always pay a living wage. What the liberals are really saying is that they want the workers to get more than a living wage, but they use the term "living wage" because it sounds better. Now I'm sure the workers all want to get paid a better wage, but they do have to eat. So if they're not getting any wage because these liberals love them so much they want to cut off any trade to protect them from earning enough to eat. You gotta love the do-gooder liberal methods.
My favorite part is the reference to the "exploitative middlemen." Isn't that a common attack on Jews? And I thought there were a lot of liberal Jews. This is a complete denial of a whole segment of the world economy - those rotten middlemen. I wonder why these liberals don't save defendants from having to deal with those exploitative criminal defense lawyers who dare to charge a fee to try to keep them from jail.
And before I move on, I like the fact that this does not
Next:
Cooperatives and producer associations provide a healthy alternative to large-scale manufacturing and sweatshops conditions, where unprotected workers earn below minimum wage and most of the profits flow to foreign investors and local elites who have little interest in ensuring the long term health of the communities in which they work. Fair Trade Organizations work primarily with small businesses, worker owned and democratically run cooperatives and associations which bring significant benefits to workers and their communities. By banding together, workers are able to access credit, reduce raw material costs and establish higher and more just prices for their products. Workers earn a greater return on their labor, and profits are distributed more equitably and often reinvested in community projects such as health clinics, child care, education and literacy training. Workers learn important leadership and organizing skills, enabling self-reliant grassroots-driven development. Safe and healthy working conditions are maintained and producers gain greater control and decision making power over the use of their local resources.
Remember before where it won't raise the cost to consumers? Now it says the workers can "establish higher and more just prices for their products." And who gets to decide what makes the price "just." If the price is higher, isn't the consumer going to think that's unjust?
Read that paragraph with a cynical eye and you will see communism leaping out at you. This is also a complete denial of the benefits entrepreneurs bring to society. Bill Gates doesn't run his company democratically, but strangely you rarely hear all those starving Microsoft millionaires complaining about how they were exploited. The computer industry is a shining example of what happens when entrepreneurs are not shackled by excessive regulation. The combination of freedom and opportunity creates wealth beyond anything cooperative institutions could ever create.
But wait, there's more ...
Fair Trade Organizations educate consumers about the importance of purchasing fairly traded products which support living wages and healthy working conditions. By defining fair trade and conducting business in a manner that respects workers' rights and the environment, the fair trade movement strives to educate consumers about the often hidden human costs of their "bargains." By providing information about producers' history, culture and living conditions, Fair Trade Organizations enhance cross-cultural understanding and respect between consumers and communities in the developing world. They also educate consumers and policy makers about inequities in the global trading system.
You see, all those Walmart, Target and Home Depot shoppers don't really want lower prices. They want to pay more. I can see the circulars in next Sunday's paper: "Sale - everything in our store is now 25% more expensive, to make sure Apu in Bangladesh can buy an extra serving of rice for his family next week." Yeah, that store's going to do well.
That's enough. I'm sick of that pablum.
Meanwhile a more traditional liberal attack on free trade appeared in Wednesday's Wall Street Journal. Democratic Senator Byron Dorgan wrote a letter defending his anti-trade book. As he puts it, his "book takes on the $800 billion-a-year, out-of-control trade deficits ... [and] pulls back the curtain on incompetent trade agreements that sell our country short by paving the way for outsourcing American jobs and running up crushing trade deficits." Dorgan says that these trade deficits will have significant and dangerous consequences to our economy and our future.
So trade deficits are both out-of-control and crushing. For a bit of history on trade deficits, see http://economics.about.com/od/foreigntrade/a/trade_deficit_h.htm. Wikipedia also has a good summary at: http://en.wikipedia.org/wiki/Balance_of_trade#United_States_trade_deficit
In short, our last trade surplus was in 1975, about $12 billion. By 1987 our trade deficit had "swelled" to $155 billion. And in the last five years our trade deficit has exploded to nearly $800 billion. For those of us old enough to remember, trade deficits in the 1980s were used to support Japan-bashing rhetoric. The trade deficit was destroying America. Let's think about this a bit. Hmm. What was life like in 1975, 1987, and how does that compare to today? Since we actually had a trade surplus, life must have been much better in 1975 than it is today, right? And since the trade deficit is now four times as large as 1987, we must be doing much worse now.
Let's talk about jobs in this context. I used http://data.bls.gov/PDQ/servlet/SurveyOutputServlet for some statistics. In the golden year of 1975, unemployment was at 8% and rising. In 1987 it was below 7% and declining. Now it's below 5% and declining. To quote Johnnie Cochrane: "If it doesn't fit - you must acquit." The trade deficit is not guilty. On most measures of the economy, we are much better off today than we were 30 and 20 years ago. My brother has a great quip on trade deficits. "They give us stuff. We give them paper." Hey, if those suckers want to give us stuff for paper, let's keep that ball rolling.
But you do have to give Dorgan credit for consistency. I did a search and found this from the Times Union on December 21, 1994:
Twelve years later and Dorgan is still beating the same drum. You'd think after 12 solid years of these out-of-control trade deficits we'd really have crashed by now. Meanwhile his home state of North Dakota is struggling under the pressure of these trade deficits with its unemployment rate now down to 2.4%. Poor North Dakota. Wait a minute. Low unemployment is a good thing. Hmm. I wonder what New York's trade deficit is with North Dakota. Maybe we need some Dakota bashing here.
As for the current fun of China bashing. In the 80s it was Japan bashing. In the 90s it was NAFTA and Mexico bashing -- remember the giant sucking sound? The Mexicans are still wondering where their jobs are. Now there's a blend of bashing China for manufacturing and India for services. With all the liberals concern for the poor, where's their concern for the poor in those countries? All of this trade is very good for the people in those countries who are really poor. I'm sick of people whining about the poor in our country. One of poverty's biggest problems here now is obesity. Please. I have poor clients. They've got running water, cable TV, cell phones, etc. Their problems are primarily social, not economic. I want to know how come the Canadians keep getting off without any Canada bashing.
I'll get to the so-called conservatives and their trade idiocy in the next post.

