During his first run for president, billionaire Ross Perot famously warned that the North American Free Trade Agreement would create a “giant sucking sound” by vacuuming away American jobs. Sixteen years later, he’s worried that out-of-control spending and the current presidential contenders are sucking away hope of addressing the giant pile of federal debt.
“We only have a few years left to get our financial house in order,” says Perot. He points to the massive federal debt load, already $9.4 trillion. The problem will only grow worse as the first baby boomers begin collecting Social Security and Medicare benefits.
[…] the loss in manufacturing jobs, growing national debt, and record trade deficits is due to international free trade. “Competitive protectionism is a proven idea with a lot of success. Free trade is historically a relatively new idea with a lot of failure,” said Dr. Ravi Batra , international economist, in his book, The Myth of Free Trade. “Free trade has done to the us what Hitler and imperial Japan could not do during the war,”
1 – As economic efficiency is the main goal of neoclassical economics, “softer” goals like the general happiness of society are ignored. Studies show that unemployment has a much more deleterious effect on a society than lower consumer prices have a benefit. But things like unemployment, ecological damage, damage to family relationships from employee relocation, are not counted by neoclassical economists because, simply, there is no way to quantify them and so they can’t be plugged into a mathematical model. French economist Leon Walras is reported to have said: if you can’t model something mathematically, it’s not worth studying.
But maybe free trade, despite its theoretical flaws, actually works? Well, no. For some 30 years, the World Bank and the IMF have provided assistance to countries in need on the proviso that they adopt free trade policies. But the World Bank has admitted this hasn’t worked well. Others say that this is putting it mildly, that it’s been a disaster, e.g., the documentary “Life and Debt”.