Free Trade

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Ron Paul is a proponent of free trade and rejects protectionism, advocating “conducting open trade, travel, communication, and diplomacy with other nations.” He opposes many free trade agreements (FTAs), like the North American Free Trade Agreement (NAFTA), stating that “free-trade agreements are really managed trade” and serve special interests and big business, not citizens.

He voted against the Central American Free Trade Agreement (CAFTA), holding that it increased the size of government, eroded U.S. sovereignty, and was unconstitutional. He has also voted against the Australia–U.S. FTA, the U.S.–Singapore FTA, and the U.S.–Chile FTA, and voted to withdraw from the WTO. He believes that “fast track” powers, given by Congress to the President to devise and negotiate FTAs on the country’s behalf, are unconstitutional, and that Congress, rather than the executive branch, should construct FTAs.

Buy American, Unless… (February 12, 2001)
Members of Congress often encourage us to “buy American” during their speeches on the House floor. Some members regularly place a “buy American” clause in various trade-related bills, seeking to protect domestic jobs by encouraging the purchase of American goods. Ironically, however, many of these same legislators vote to prohibit American companies from gaining access to new markets overseas. They do so by supporting our senseless embargo policies, which simply help our foreign trading competitors at the expense of American companies.

Of course most politicians claim that they support free trade. Intuitively, most Americans understand that access to foreign markets provides significant benefits to US citizens and American-based corporations. However, we continue to pursue a policy of denying or restricting domestic companies from selling to Cuba, Iraq, Iran, China, and other countries. This inconsistency is especially evident when we consider “export financing,” which really is foreign aid designed to help other countries buy American goods. Most Washington politicians support the practice of export financing, arguing that access to foreign markets benefits American companies, and not just foreign consumers. However, the opposite argument is made with regard to our embargo policies. Suddenly, increased trade with countries some want to label as unworthy only benefits sinister foreign consumers, and not domestic producers. This nonsensical position is maintained by many in government who favor government-managed trade which benefits certain chosen special interests.

Conflicting and inconsistent views on trade policy result largely from a lack of understanding of basic economic principles. Free trade is not a zero-sum game where some countries benefit and others inevitably suffer. On the contrary, true free trade by definition benefits both parties. Free trade is the process of free people engaging in market activity without government interference such as tariffs or managed-trade agreements. In a true free market, individuals and companies do business voluntarily, which means they believe they will be better off as a result of a transaction. Tariffs, taxes, and duties upset the balance, because governments add costs to the calculation which make doing business less attractive. Similarly, so-called managed trade agreements like WTO favor certain business interests and trading nations over others, which reduces the mutual benefit inherent in true free trade.

Free Trade With All, Entangling Alliances With None (September 21, 2001)
Free trade with all and entangling alliances with none has always been the best policy in dealing with other countries on the world stage. This is the policy of friendship, freedom and non-interventionism and yet people wrongly attack this philosophy as isolationist. Nothing could be further from the truth. Isolationism is putting up protectionist trade barriers, starting trade wars imposing provocative sanctions and one day finding out we have no one left to buy our products. Isolationism is arming both sides of a conflict, only to discover that you’ve made two enemies instead of keeping two friends. Isolationism is trying to police the world but creating more resentment than gratitude. Isolationism is not understanding economics, or other cultures, but clumsily intervening anyway and creating major disasters out of minor problems.

Free trade makes sense (June 7, 1999)
[...] if someone says they are for “free trade,” one must look carefully what they really mean, for the classic (and common sense) definition does not apply.

All to often in Washington, free trade is used when one really means “subsidized trade,” or, tax dollars being funneled to foreign governments to buy American products. Similarly, the phrase can mean to use tax dollars to bail-out American firms for risky overseas ventures, or managed trade by the World Trade Organization to serve powerful special interests.

On the other hand, those of us who oppose using the taxes of American citizens to prop-up foreign governments or American corporations are derisively called “isolationists.” There are indeed some people who are isolationists. They call themselves “fair traders,” though. Exactly what this means is open to debate. All too often it involves letting the government determine what is and is not “fair” in the private trading between individuals who live in different countries.

Sadly, these definitions all hinge on the assumption that there are essentially only two options: tax dollars being used to subsidize corporations/foreign governments, or no trade whatsoever without the rubber stamp of government bureaucrats and special interest groups.

The bottom-line of both options, of course, is higher taxes for Americans. Higher taxes to finance the subsidies, or higher taxes on incoming products (and make no mistake, a tariff is a tax, paid by the American consumer).

There is another way. Free trade and free markets are, without a doubt, the best guarantor of peace. But this requires something all too few in Washington want: less government intervention.

It is indisputable that individuals know better how to provide for their families than government. It is also indisputable that a company is better equipped to know what its market will tolerate than a bureaucrat in Washington. In this way, a person is able to determine what goods best meet their individual needs, weighing numerous factors in their decision. But when government intervenes, it no longer becomes possible for an individual to provide for their family and business in the most expedient fashion. This is the antithesis of liberty.

The World Trade Organization (March 20, 2000)
The economic argument for free trade should be no more complex than the moral argument. Tariffs are taxes that penalize those who buy foreign goods. If taxes are low on imported goods, consumers benefit by being able to buy at the best price, thus saving money to buy additional goods and raise their standard of living. The competition stimulates domestic efforts and hopefully serves as an incentive to get onerous taxes and regulations reduced.

If one truly believes in free trade, one never argues a need for reciprocity or bureaucratic management of trade. If free trade is truly beneficial, as so many claim, unilateral free trade is an end in itself and requires neither treaties nor international management by politicians and bureaucrats. A country should promote free trade in its own self-interest — never for the benefit of someone else.

Those not completely convinced of the benefits of free trade acknowledge a “cost” of lower tariffs for which they demand compensation and fair management. Thus, we have the creation of the WTO. By endorsing the concept of managed world trade through the World Trade Organization, proponents acknowledge that they actually believe in order for free trade to be an economic positive, it requires compensation or a “deal.”


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136 responses to “Free Trade”

  1. Kareem Junick

    I like this website its a master peace ! Glad I found this on google .

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  2. int19h

    True free trade is only possible when there’s not only freedom to shop around for workers for businesses, but also freedom to shop around for jobs for the labor. Otherwise you get this situation where Chinese workers crank out shiny iGadgets that they are never able to buy, which are sold on U.S. markets – because Apple can and does move manufacturing to China while still selling in U.S., while your average Chinese worker can’t move to U.S. to look for a well-paid job here.

    So, either it’s down with borders altogether, or – if for some reason you don’t feel like it’s a good idea – then protectionism is necessary to even out the playing field that is skewed by countries having different conditions for their workers (which cannot otherwise even out by said workers voting with their feet).

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  3. logical solutions

    Free trade is good as long as the country you’re trading with has the same exact labor and environmental standards as your own. This includes wages, hours, safety, workers rights etc.

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  4. dgatlin

    You guys are all wrong about free trade. Have any of you bothered to look at the unemployment numbers after NAFTA was passed? Stop using your stupid uninformed emotions and look at the consequences of the policies you support/oppose. I highly recommend the book “Basic Economics” by Thomas Sowell. At bare minimum pick up the book in the store and read the chapter on free trade. Your emotions are causing you to vote in a way that is harming the people you think you’re protecting.

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  5. Sjanoe

    All of you need to read an economics book

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    1. Sjanoe

      Otherwise you are all invalid. Lol and “fair trade” you have to be kidding me might as well stay in the same system we are in today. Yes, china is devaluing its currency it called “Competitive Currency Devaluation” I wrote a paper on it. China is trying to run a trade surplus in the hopes to raise their GDP in the short run. However, this causes the us to run a trade deficit. Which isn’t really a bad thing it just increases our imports while decreasing our exports. I know this may seem like a decrease in GDP however this trade deficit allows for other factors in the Keynesian GDP equation to rise. Chinas trade surplus only hurts the purchasing of its domestic consumers and will eventually reach a limit of devaluation for the yuan to where the only way left for the yuan to go is up bringing back a balance of trade. Also china does compete in the free market other wise they wouldnt be trading with us.

      We also should allow for free trade and outsourcing because this actually creates more jobs for Americans through growth. If firing one person allows you to hire two people a month later. That one person is gone in my book. There is no fairness in a efficient competitive market otherwise it would be a equal in efficient let every take advantage of you market.

      We shouldn’t open up the oil reserve just read on the rybcynski theorem and you will have an epiphany to stop complaining about dang oil.

      You also should look into microfinance and how we can replicate it in the united states f you really are concerned about job creation.

      Lol honestly, like the government could really effect the economy… Bs

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  6. Chris M.

    So if as Rand Paul says, the average American Family saves $900 per year, what does he make of the fact that $2,500 per capita is lost in trade deficit per year? That’s money no longer circling through the economy. It goes into China’s economy (as well as all the others like it), whose government siphons it off their laborers (more or less slaves) and then those dollars are not used to buy American goods. The government takes them and uses them to invest in treasury bills thereby allowing the U.S. government to run budget deficits, or they may purchase raw materials as they are fond of doing and cause inflation in those commodities. We subsist by devaluing our currency while China tries to sustain it while taking advantage of their reserves while they last. Both countries are stupid, but in my opinion it could have been avoided if we never started trade with them in the first place. I support free trade on the condition that (therefore fair trade rather) workers within a country are protected from wage exploitation and allowed to form labor unions in order to bargain with their labor more effectively so that laborers in two different countries are not competing themselves into squalor (which if that happened would also mean there wouldn’t be a market for their own goods anyway… reminds one of Henry Ford doesn’t it).

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    1. Phil

      Oh no, china is manipulating their currency to give us their goods at a cheaper price, omg what ever will we do?

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      1. Spudwrench

        Ask the millions of people who have lost their jobs if that lower price of goods is a fair trade. You could be next. Over a billion people, I’m pretty sure someone over there can do YOUR job cheaper, too. College educated? Wait a few more years and China will flood the educated occupations as well.

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        1. Citizen

          Sud,

          China has more graduate engineers than the US has college students.
          Apple Computers built their plant in China BECAUSE they couldn’t find the necessary engineering talent HERE!

          Our GOVERNMENT has added so much OVERHEAD costs by regulation and taxation over the past 70 years, that we simply can’t “Make it Here” anymore.

          When government’s add so much overhead to American products, we can’t sell those products to anyone, business either close their doors or they move out.
          Most businesses have moved off shore to stay competitive AND get better educated workers.
          Tiawan, Sinapore, Phillipines, South Korea, India, China etc. ALL have higher student test scores and better educated workers AND their governments don’t tax businesses forcing them to leave their countries.

          It’s simple…
          p.s
          And NO, it isn’t slave labor or environmental sweat shops.
          America just isn’t competitive anymore and our Government is the primarily cause!

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  7. American Nationalist

    The WTO is owned by the European. They allow European countries to have double protectionism (European federalist taxes + local national taxes) and allow more subsidies from their countries.

    I agree with free trade as in no governmental restrictions on our borders, but that doesn’t mean everyone should buy crap from other countries.

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  8. Big V

    How in the world can one have free trade with a country that does not partipate in the free market? China does not do “free” anything. They opress their people’s wages and devalue their currency on purpose. They peg it to the dollar.

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  9. Jonathan

    I’m uncomfortable with unilateral free trade, although I understand it in principle. Ever since Alexander Hamilton, tariffs are a Constitutionally valid way to protect industries and raise revenue. Using Ayn Rand’s interpretation of “initiation of force” by democracies against non-democracies, the US government is within its rights to impose tariffs and bans against the goods of authoritarian nations.

    The most palatable argument for unrestricted free trade that can be made to protectionists like myself is Hume’s Price-Specie Flow Mechanism. So in theory, if every nation adopt a gold standard and didn’t devalue their currencies against that standard by running the printing presses, it would be very costly to engage in mercantilism or currency manipulation. Unfortunately the theory falls flat when governments and banks drop the gold standard and generate dollars out of thin air.

    This may explain why Ron Paul says he’s for free trade but still voted against NAFTA and WTO. So far I haven’t heard anyone in Paul’s campaign make the Humean balance-of-payment argument.

    http://mediawiki.middlebury.edu/wiki/IPE/Price-specie-flow_Mechanism

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  10. Ace81
  11. Citizenelect

    Free trade is an English oligharcy,s way of destroying sovereign nations! Fair trade is the ideal alternative. An example of free trade, buy tomatoes in brazil cheap, sell to italy higher price, buy from italy cheap, sell to Australia at higher price. This goes on and on and on, Profit for the oligarchy at same time destroying nations economy. We cannot buy Australian products here, coles and woolworths both brit- corporations shutting down our economy. Literaly killing our farmers. WAKE UP. Stop these London Banksters who also control your Fed-and our reserve bank!

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  12. RichardLudwig

    how about this – never mind free trade – how about FAIR TRADE instead?

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  13. JohnstonSequoia
  14. fungus

    I agree with every position by the Paul campaign except this. This is the one area that needs alot more explaining by the Paul platform to the average citizen. I too agree with Joe Krill. It has to be about FAIR trade. Comments like the one I heard the other day from Rand Paul saying “Americans have to understand that when they go to Wal Mart, the avg family saves over $900 per year on their household expenses” make no sense to me. We have sent the majority of our jobs overseas and we don’t make anything here anymore! We have killed small business and the small community in this country. How does this make sense? Pretty soon we won’t have anything to trade!

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  15. Troyss12

    You can’t be for free trade and against NAFTA. That is double speak. Ron Paul does this all the time. It’s nothing but focus group language

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  16. jbrack

    I am all for free trade but part of your platform should be that foreign factories need to comply with the same laws/regulations that domestic factories do. The ethical stance is that we want even footing for U.S and foreign workers. We don’t want our trade with foreign countries to be at the price of exploiting foreign workers or polluting their environment. We want them paid the same wages, and live/work in the same clean, safe environment.

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  17. rich m

    Joe Krill makes more sense than any politician running for the office of CEO of the U.S. We should hire him before someone else realizes the truth that he speaks and gets the upper leg.

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  18. Joe Krill

    “Fair Trade” is having the qualities of impartiality and honesty; free from prejudice, favoritisn, and self interest. Just, equitable, even-handed; equal. Why does everyone forget that what we should be championing is “fiar” trade and not free trade. Joe Krill

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  19. waterwarcrimes

    The Canada US Free Trade Agreement and the NAFTA were vioalted by Canada, Queen Elizabeth and her agents, the moment the ink dried and there has been a continuiing violatio never since in relation to WATER EXPORTS

    http://www.waterwarcrimes.com/the-big-picture—grand-plan-to-steal-canadas-water-resource-wealth—the-traitors-within.html

    It is arguable that insiders with successive Canadian governments have been aprt of an ongoing conspiracy to violate US Anti Trust – fair trade laws

    http://www.waterwarcrimes.com/british-columbia-premiers—water-war-crimes—were-us-anti-trust-laws-broken-by-canadian-premiers-assisting-to-create-a-monopoly.html

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  20. Solonsays

    I am tired of people whining negatively about unions. Unions are a working class agent that protects workers from taxation without representation sometimes called inflation derived from Federal Reserve Monetary Policy. The Federal Reserve is America’s number one jobs destroyer as well as destroyer of family values. No worker, union or non-union should have his standard of living deliberately stripped away by inflation so that the banking system can create artificial profits or artificially manipulate the economy using leverage. On another note, if America had a fair and dynamic tax code, working Americans would be more invested in trade policies that keep jobs in America. On another note, what is your heritage worth if lobbyists can pay off a politician to export your job overseas? On another note, what is the basis of family values if you have to work three jobs and never have the time to invest in or manage your family? The rules of capitalism are arbitrary and are politically tainted to benefit those who have bought political power.

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  21. CNG_Oklahoma

    Buy American and get off foreign oil. Support HR#1380 the Nat Gas Act and use AMERICAN domestic natural gas to power our cars at 1/3 rd the price of refined gasoline!!! Natural gas requires no refining. It can be used almost exactly how it comes out of the ground as Methane

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  22. TRBO

    How can you compete with slave labor in China? Free trade does NOT work!

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    1. tired of whiny babies

      @TRBO

      Have you Been to China? I have, traveling there for mor than seven years and its not slave labor building the products, its a highly educated and skilled labor force. China graduates more honors students from universities each year than we have students total. the factories I deal with have machinists with engineering degrees, etc.

      Please get your facts straight before pontificating and showing your lack of knowledge.

      Free trade works when you get rid of the unions that destroyed this country.

      the union slogan should be, ” keeping bad paople in good jobs”.

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      1. Samus

        Because communism is the way to go. @tired of whiny babies @TRBO

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  23. CDSJ

    We are the hottest night club on the strip…….Are you telling me that we shouldn’t charge a cover? Tariffs help keep jobs in America, and encourage other countries to move factories over here. Free trade is just a race to the bottom for Americans. Dr. Paul I love ya, but you have this one wrong.

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    1. asdljfasdflkj

      @CDSJ Tariffs reduce our ability to take full advantage of our comparative advantage and move beyond our production possibilities curve. For example, we can’t build the same consumer electronics that China can because they have a huge supply of the previous metals required the make them. Let them do that and we’ll trade them new hearts or something.

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  24. Citizenelect

    BTW-Love the way nice names are used for these Death policies huh? Free trade = slave trade these times if you think of the opposite to a word the mainstream media use you are pretty well on the ball LOL

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  25. Citizenelect

    Free trade ultimately, kills nations, Jobs lost, farmers destroyed, free trade only serves the Oligarchies reign of destroying. Nations sovereignty if Ron Paul supports the founding fathers. Free trade must be abolished! Replaced with Fair Trade. Only then can we have a better world, with All Nations. Eliminating poverty.

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  26. bobbob

    Unless Ron come to see “this” he won’t get my vote … nor the vote of many other people. As a kid, I was raised to work hard and it would pay off. No, as one gets older, companies don’t want to pay you for your experience anymore and turn to a younger workforce who thought the same BS I did when I was 30. The so called “free market” may work in theory; however, in reality, it doesn’t. It lead to those who have the power exploiting those who don’t. Need an example? On the day of 9-11 “capitalist” were selling water on the streets of NY for $5.00 a bottle. There response when questioned was “hey, I’m not forcing you to buy it”. This is the mindset that free trade will exploit to the hilt.

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  27. bobbob

    Free trade sound great; however, the ones with money will always go where the cheap labor is … and that is NOT “here”. I was once told by an employer that “you go to Walmart to look for a better deal on a tv; why can’t I look for a better deal than you”. This IS how corporate America sees the American Worker; namely, he/she can always be replaced with someone (something, i.e. robot) cheaper.

    I’ve like Ron Paul and still do. However, “this” is a deal breaker for me. Allowing corporate America to “free trade” will only hurt the American Worker. Walmart is a case in-point. For those with jobs, Walmart is great because the prices are cheap. However, those cheap prices come at the expense of their neighbors who now have no job because the company that makes lawn chairs has gone to China; the company that makes washing machines has now gone to Mexico, the car company has gone to Korea, etc. This is leaving us with a divided country where those who DO have a job see no problems at all with out current economy because they can buy stuff cheap … and those who do NOT have a job being left up the creek without a paddle.

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    1. Samus

      Except Korean cars actually work unlike American cars that take up too much fuel. @bobbob

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  28. Wonkbro

    Calling someone “moderately retarded” tells me that you are “completely idiotic”.

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  29. Wonkbro

    When technology (automated machines and such) replaces jobs that at one time employed people, nobody calls for the removal of these technologies.

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  30. MatthewOStroben

    Smooth-Hawley tariffs did not extend the Great Depression. Many economists hate tariffs and Smoot-Hawley is a great stick with which to beat the living daylights out of protectionists. This is from

    http://eh.net/book_reviews/peddling-protectionism-smoot-hawley-and-great-depression

    Economists aren’t lying when they casually refer to Smoot-Hawley playing an important role in the Depression. (Most economists who have studied the issue know that it didn’t.) They think, vaguely: Tariffs Being Bad + Highest Tariff Rates Ever = Big Impact. Problem is that reasoning mixes micro with macro. Economists hate tariffs because they interfere with the pursuit of comparative advantage, misallocate resources, and, in that sense, lead to lower incomes … in the long run. The macro of tariffs is murkier, though. The American on the street’s argument for protectionism goes like this: “Raise tariffs on imports so people will buy more things made in the USA. Then U.S. companies will produce more and hire more people.” The thing is, as a story about the short run, that reasoning may well be correct. Oh sure, foreign retaliation for tariff increases may slam domestic exports and there can be price level effects and exchange rate effects that have a contractionary impact, and so on. That’s why the macro of tariffs is murky. But, at any rate, it’s at least conceivable that Smoot-Hawley, rather than causing the Great Depression, actually caused U.S. production and employment in the early 1930s to expand. Not by much, mind you, because foreign trade was a tiny part of the U.S. economy at that time. But expand rather than contract.

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  31. MatthewOStroben

    I would vote for Ron Paul. But unless someone brings up the true problem of free trade with 3rd world countries, and tells it like it is.. Free trade isn’t free trade when the country your trading with gets all the jobs. Not everyone can work in high tech or service industries. Free trade is a lie unless your standard of living is the same. watch this movie with Charlie Rose talking with Sir James Goldsmith. A self made Billionaire in 1994 that forecasts what is happening to us now.

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    1. MatthewOStroben

      I would vote for Ron Paul. But unless someone brings up the true problem of free trade with 3rd world countries, and tells it like it is.. Free trade isn’t free trade when the country your trading with gets all the jobs. Not everyone can work in high tech or service industries. Free trade is a lie unless your standard of living is the same. watch this movie with Charlie Rose talking with Sir James Goldsmith. A self made Billionaire in 1994 that forecasts what is happening to us now.

      http://video.google.com/videoplay?docid=5064665078176641728#

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      1. outdoorsmann

        The thing that is scary about this video is that the “clueless” naive advisor is now on Obama’s team of advisors which would explain the expansion of additional free trade agreements lately. They are doing exactly opposite what needs to be done to create jobs while making it easier for companies to find additional pools of cheap labor. How long can this mentality go on before the politicians GET IT! I sure hope Ron Paul sides with Sir James Goldsmith on this. He’s nailed it on the head with his observations.  Ms. Tyson needs to find a new line of work, I hear China is hiring. People want to refer to tariffs in a negative sense due to history but this country has NEVER been in this situation before so history has no bearing. China and India are killing US manufacturers every day. We can not compete. If we automate the processes we don’t need employees so thus either way we have more unemployed unless the American worker wants to make what they are paid in India. $100/month. FREE TRADE IS NOT FREE! It’s only plausible given the equality of both trading partners. You don’t hear of problems caused with Canada.

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        1. MatthewOStroben

          @outdoorsmann I agree and even Fox news doesn’t seem to bring up free trade and how it is harming us.

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    2. Jeremy Bell

      I wrote a peace back in DEC 2010 trying back then to somewhat explain the free trade.
      Basically all I can say today if the people want free trade, as long as you are ready to pay more taxes minimum of 2%.
      That 2% comes from tariffs, this is what free trade will do away with.

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  32. John_Galt

    “Free Trade” today is insanity and completely one sided; that is against the United States! The trade imbalance with Red China is currently one billion dollars per day, and rising! Red China does not buy our goods, they do not want our goods, they are buying our technology and land! If tariffs are bad, why are they so successful against the United States? Too many citizens have lost their jobs and livelihoods because of these free trade agreements. Wake up America!

    The United States should only trade with foreign countries when it is advantageous for the American citizen to do so!

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    1. MatthewOStroben

      @John_Galt I Agree, how is free trade beneficial to America when we cant even compete with counties like china? Tariff’s are a tax, but a tax to make it so we can compete. Meaning that we can make some of the same products and sell them at the same price. Its not an issue of cheaper items make it so more Americans can buy these things. It’s an issue of jobs. Without Tariff’s Many companies just cannot make it in America, That means less jobs. We don’t have to Tariff everything, Just non-essential items that we can make in America and create jobs. The Argument form both the left and the right is that we would not want these jobs. Take away food stamps and I bet a lot of people would want these jobs.So tell me, What makes more jobs? A factory in your town or someone that imports and sells foreign goods?

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      1. PeoplePower

        @MatthewOStroben@John_Galt I agree too.

        Funny how a protective trade policy works for China isn’t it?

        It would work here too. Reagan implemented a tariff on Japanese motorcycles to protect Harley-Davidson in 1984.

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  33. w1945

    Ron Paul could more than likely go along way when it comes to fixing this mess we are in. I see that we will more than likely have more bank bailouts. Will people elect Ron Paul? I would truly hope so but my guess is they will not. How will all this play out? First we will elect status quo and when that happens our economy will go straight down the drain. Our currency will more than likely loose it’s status as the world reserve currency and since that is all we produce any more, printing money, then kiss us good by. Our socialist state will then come un-glued. People will riot in the streets, building will be burned. You will have to sit with a rifle and guard what you have, that is if you have anything.

    Finally after it is all over and bank accounts have been cleaned out, complete towns burned to the ground,homes have been lost and 401k’s destroyed and just after we have boiled our dog on the kitchen stove, then people will wake up and be ready for Ron Paul and true change. Only problem is Ron Paul will probably be gone by then. I am afraid we are about to let the best chance we ever had slip through our fingers. Some of us can see something coming from afar and will do something to avoid the pain, like elect Ron Paul, but sorry to say most of us have to feel the pain first.

    We keep thinking that if we just go with the status quo everything will work out. That will not work this time around. The fat lady is about to sing. We are spending over $100,000 every second in this country. No sane person can see a good out come with that. Just remember if we do no elect Ron Paul we are going to feel the pain and that is guaranteed.

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  34. Jean-François

    I’m still dismayed to see how so many people don’t get it, or perhaps when I raise this topic I do not use the proper words?

    If tarifs were a cure to anything, the adoption of the Smooth-Hawley tariffs in the spring of 1930 by Hoover (when the unemployment was 9%) would have “cure” the economic crisis, but it just worsened it.

    I agree that the permanent trade imbalance is a problem, but Ron Paul is suggesting new ways to cope with this issues, some solutions that most republicans and no democrats want to consider.

    -Balancing the budget deficit: The Chinese can do 2 things with their dollars, they can purchase US goods and they can purchase US bond treasuries. What do you thing they will do if one of the two windows is closed?

    -Stop funding the IMF and several other organizations since they are just using the money to help other countries to compete with the US. And here China cannot retaliate

    -Sound currency: If the Fed stop to print US dollars, a trade imbalance would mean a scarcity of US dollars in the US, which means deflation in both salaries and prices (for US made products) and higher prices for foreign products. It’s a self regulating mechanism because the US products would become cheaper abroad and China would send back the dollars in the USA this way.

    Now what happens if the US put a tariff of 100 $billion on Chinese goods?

    Let say that 5,000,000 Chinese workers lose their jobs. Does it mean that US companies will replace them? Perhaps in 10%, 20% of the cases, but in most cases they will not get the loans from banks to purchase material and expand if the situation is volatile and many people around lose their job ( see the Chinese retaliations). In many cases products from Malaysia, Pakistan, Bengladesh will replace the Chinese goods and it is very complex to manage and adjust tarifs for 100 countries.

    So lets say that 500,000 Americans find a job with this insteadf of 5,000,000.

    The Chinese retaliate with tarifs too, 100 $billion. 5,000,000 Americans lose their job, but the Chinese can easilly find similar products in Canada,Australia,Russia.

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  35. Mike B

    Don’t you think free trade like this would lower the average pay of our production workers here in the United States as American companies try to compete with companies of other countries who have lower standards of living and pay their workers less? Eventually it may balance out, but I believe that the average American production worker would be severely crippled economically in the short and long run.
    I like many of Ron Paul’s policies, but this one scares me. How can American companies compete with foreign companies who pay their workers so much less? I think it would erode a big part of the middle class. Also, what’s to stop American production companies from taking all of their production jobs and moving them overseas where they can cut costs by paying workers less? American workers are more than ever having to take pay cuts to keep their jobs in the United States. If free trade were allowed, what are all of the production workers going to do?
    Will the American companies really lower the cost of their products even though it cost them less to make by shipping jobs overseas? Or just rake in more profits by selling their products to the people who never worked in production?
    Are there any extensive objective studies on these free market policies or is it all just theory? If there are studies, please post a link.

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    1. WE THE PEOPLE

      Those are all good points.
      Paul’s foreign policy position is more national, but trade is more global oriented.
      Wonder why that is? I don’t see a problem with having a national patriotic fair trade policy. After all, Ron Paul voted against NAFTA.

      The typical Republican is detached from the middle class and it’s workers.
      That’s part of the problem for the party that will surface at some point in elections if the middle class realizes that they have vote for their own interests first and the GOP does not have the same interests. If not, the financial sector will be the only focus and the middle class along with it’s jobs will be long gone.
      I’m voting for whoever has the best plans for American jobs. No middle class = a continuation of the Second Republican Great Depression. Those of us Americans that work for a living can’t afford much more of that!!!!

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    2. Ron C

      Um. Here’s some examples.
      http://www.heritage.org/index/Country/Switzerland
      (note the zero percent tariff, besides like agriculture)
      http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/switzerland/
      http://www.ehow.com/facts_6935129_switzerland-trade-agreement.html

      BTW they have like, less than 4% unemployment.

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      1. Canuck

        To Ron C:
        Canada is another example. It hasn’t permanent, chronic trade deficits like the US.
        For the year 2008: +45 $billion (trade surplus), or 2.86% of the GDP.
        For the year 2010, -9 $billion ( trade deficit), about 0.57% of the gdp.
        A comparison with the USA:
        - 500 $billion in 2010, so a trade deficit representing 3.5% of the gdp.
        But regarding the US, the trade balance is always negative, in 2008 it was -700 $billion or -4.9% of the GDP.
        As far as I know Canuckstan doesn’t rely on child labour

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      2. John_Galt

        The countries that are doing well have been dumping their goods in the United States, so called free trade is and has been one sided.

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