Freer Trade Makes Us Richer. Protectionism Makes Us Poorer.

Many of my friends and acquaintances disagree with Donald Trump’s “trade war” antics. His constant, inexplicable flip-flops and 180-degree turns make them nervous, and they can see that his unconstitutional tariff policy (the US Constitution gives only Congress the power to tax) is already costing them money.

But many of my friends, including those on the putative “left,” also support tariffs and “protectionism” in general. They dislike the constant uncertainty that comes with having Trump in charge of the matter, but they’ve spent decades complaining about how “free trade” has “hollowed out the middle class” and “sent American manufacturing abroad” ever since the 1994 implementation of the North American Free Trade Agreement (NAFTA).

They want SOMETHING done, usually couching that desire in calls for an “industrial policy” that brings factories back from Latin America and Asia, offering them the same low prices on the same cheap goods, only with “Made In America” on the labels.

Before addressing their complaints, let’s get one thing straight: NAFTA was not “free trade.” It was government-managed trade, just like before, only on freer terms. It cost some Americans their jobs, and created other jobs for some Americans too.

Example: Once NAFTA came into effect, the company that made French’s mustard closed its plants in Mexico and Canada and expanded its plant in Springfield, Missouri, creating hundreds of new union jobs.

Perversely, as a union worker at that plant, I occasionally worked in a warehouse that had previously been a television factory before that company moved its production overseas.

Jobs came, jobs went under the fake “free trade” agreement. But what has the American economy looked like since?

Well, the real median US wage went up from $30,200 per year in 1993 to $42,220 in 2023 according to the Federal Reserve Bank of St. Louis. “Real” means “adjusted for inflation.” Both of those numbers are in 2023 dollars. Americans are 28.5% wealthier now than we were the year before NAFTA went into effect.

Manufacturing output? Also up about 28% since 1993. Manufacturing employment went up, not down, with NAFTA. It began falling in the early 2000s — due  not to “free trade,” but to increased automation.

What DIDN’T go down was employment in general. As of last month, the US unemployment rate stood at 4.2%, below the 5% rate that economists think of as “full employment” (there are always SOME people looking for jobs, and some people who aren’t looking for jobs).

More people are working — and they’re mostly working in jobs that don’t involve eight hours a day at a sewing machine, or on a forklift, or wrangling a welding rig or rivet gun. If you’ve never done factory work, believe me when I tell you that’s a GOOD thing.

The real problem with Trump’s trade war nonsense isn’t that he’s a mercurial nitwit,  although that’s true.

The real problem with Trump’s trade war nonsense is that freer trade makes us richer and economic “protectionist” schemes make us poorer.

But you don’t need me to tell you that, do you? You’re learning it right now.

Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY

“Constitutional Crisis?” No, Just Time To Stop Pretending The Constitution Matters.

US Constitution Preamble

As of April 12, according to the Supreme Court, the Trump administration must file a daily declaration as to the location of one Kilmar Abrego Garcia, along with details of what steps have been, and are being, taken to “facilitate his immediate return to the United States.”

Garcia’s case is an open and shut matter.  The administration freely and openly admits that the Maryland resident’s deportation to El Salvador was illegal and “mistaken.” The court has therefore ruled that he must be returned.

But that doesn’t mean he will be.

Trump and El Salvadoran president Nayib Bukele publicly smirked their way through an April 14 meeting at the White House, denying that Trump could or would demand Garcia’s return, or that Bukele would comply if he received such a demand.

On April 13, the US Department of Justice filed a retort to the court’s ruling, claiming that “exclusive power of the President as the sole organ of the federal government in the field of international relations” supersedes that ruling.

That language comes from the court’s ruling in a 1936 case, United States v. Curtiss-Wright Export Corp., and feels rather odd given Trump’s past disdain for the notion that SCOTUS precedent shouldn’t be overturned lightly.

Let’s talk about where that language DOESN’T come from: The US Constitution.

According to that document, the president has strictly limited powers of any kind,  especially over foreign policy.

He can only enter the United States into treaties with the approval of 2/3 of the Senate.

He’s only commander-in-chief of the armed forces when they’re called into the “actual service of the United States” via congressional declaration of war.

He doesn’t get to levy taxes, on Americans or anyone else. That power belongs to Congress.

Neither he nor Congress have any constitutionally enumerated power to regulate immigration.

As for states of “emergency,” the word appears nowhere in the Constitution which includes no magic presidential power to usurp any of the aforementioned powers by declaring one.

Presidents love to point out that they’re “chief executives,” but the emphasis always seems to be on “chief.”

What is an executive? One who executes.

What does the president execute? The law, as passed by Congress.

The president, according to the Constitution, is “chief of doing whatever Congress says to do” on everything, foreign policy included.

The Supreme Court serves as referee when arguments arise as to the constitutionality of Congress’s instructions or the president’s execution of those instructions.

Congressional abdication of responsibility and judicial abdication of authority have, over time, given us an “imperial presidency” of which Donald Trump is just the current instance.

Which brings me back to that Lysander Spooner quote I share with you several times a year:

“But whether the Constitution really be one thing, or another, this much is certain — that it has either authorized such a government as we have had, or has been powerless to prevent it. In either case, it is unfit to exist.”

We should stop pretending it DOES exist in any meaningful way — and act accordingly.

Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY

Tax Form Vocabulary: The Fifth Leg

In 1862, Abraham Lincoln doubted his authority to free slaves held in the Confederate states by executive order (the Emancipation Proclamation), and, according to then-congressman George W. Julian of Indiana, “used to liken the case to that of the boy who, when asked how many legs his calf would have if he called its tail a leg, replied, ‘Five, ‘to which the prompt response was made that calling the tail a leg would not make it a leg.”

That line, usually quoted using a dog rather than a calf, comes to mind for me every April as millions of Americans arrive at line 37 of the standard US federal income tax return form, the 1040:

“This is the amount you owe.”

Calling a demand for payment a debt doesn’t make it one.

Under threat of violence, you might well decide to  pay “protection” money to an extortionist, but you don’t “owe” that money.

Even if the extortionist belongs to a gang which happens to have marked out some turf other people own and live on as its territory, we’re not talking about a real debt. You neither borrowed money from, nor entered into any kind of honest and voluntary exchange with, that gang.

When the gang calls itself a “government,” the situation differs not at all in kind, whatever pageantry and trappings the extortionists may drum up to justify their demands.

The claim that you “owe” a government your respect or money per a “social contract” you’ve never seen, let alone signed, is just a prettified version of “nice place you got here — be a shame if anything happened to it.”

If anything, governments are worse than the run-of-the-mill criminal organizations they otherwise resemble.

Sure, the guy who doesn’t want his bodega to burn down some dark night hands over an envelope full of cash every week to wise guys in cheap suits … but he probably doesn’t spend 13 hours a year filling out paperwork for them, like the average American does with La Cosa IRStra.

And should the envelope come up light some week, his robbers probably don’t engage in a bunch of moral posturing and self-praise. They just deliver a beat-down and a warning. The whole thing may be just as brutal, but it’s at least a little less dishonest.

You’ll probably fill out tax forms this year as always, but don’t let the government convince you that you “owe” it anything.

Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY