Saturday, June 19, 2010

The Giant Sucking Sound Gets Louder



Image from "Two Decades of Greed" by Jim Quinn.

Ross Perot famously warned that if NAFTA was passed there would be a "giant sucking sound" of jobs leaving the United States. NAFTA became law in 1993. For the first few years, no such sucking sound was heard. In fact, manufacturing jobs went up somewhat. This was hailed at the time as "proof" that Perot was wrong. But he wasn't wrong. He was all too right.

It takes years for companies to complete the complicated process of closing down factories and shipping them off elsewhere. Big companies typically would do a test case, try it with one factory, and see how it works. If it does, then they shift production in earnest. The initial movement was hidden by the recovery from the 1991 recession. It looked like the numbers were getting better for a while, but now we see the truth. NAFTA and company simply gutted much of our manufacturing base. Were it really free trade, I might have less objections. But its not free trade, its managed trade with government panels picking winners and losers.

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