Letters by a modern St. Ferdinand III about cults

One of the great myths of our world along with Islam-is-Peace (and a religion); GlobaloneyWarming (or Climate Change); Government-is-your-friend (or coercive Socialism and Marxism); is that we live in an age of unfettered global competition and trade (see here for the limits of Globalization). According to Neo-Marxist and media myth; the flow of products and services is unregulated, dense, intrusive and is of course destroying Mother Earth. Ergo, markets, personal choice, trade and investment must be micro-managed and even halted.

The animus against the little-understood theory of capitalism, finds such an emotional outlet in the general depiction that American (and Jew) inspired trade is somehow bad, inimical or will eviscerate nation states. As with all things Marxist-Socialist-Fascist, this view is completely divorced from reality. We have too little trade and globalization. It is tepid. Globalization is only reasonably strong and virile within technology and financial services and even here, massive barriers exist on every Continent which distort trade patterns.

Besides tariff and formal trade barriers, there exist many informal and hidden issues surrounding protectionism that comprise national and regional trade policies. Trade barriers have dropped enormously in the past 50 years, but there remain many obstacles to trade both inter-regional and multi-lateral....technical standards, voluntary export restraints; subsidies, labour standards, and environmental protection constitute real and imposing barriers. (America vs. Europe, pp 117-118)

Every single industry is subject to huge manipulations from government including Finance. The Tech industry is perhaps the only sector which is singularly free from state mis-management and coercive regulations, though every state has an insipid regulatory body which overlooks telecoms and by extension downstream technologies. It was the brilliance of these regulations and regulators which kept the Western world locked into white and black rotary dial phones for 30 years longer than necessary; whilst ensuring the unending and ever-rising level of profits for the state owned, or protected telecoms firms. How nice. Millions of jobs have been created worldwide thanks directly to the liberation of the Telecoms sector.

When people descry against manufacturing or offshoring of production they routinely insult and disparage businesses, business men, capital owners or the system of market dynamics. The real issue with offshoring is this: taxes, fees, regulations and government distortions are so powerful, engaged and detrimental, that offshoring production to avoid the above is mandatory for a business to survive. That is the reality of what is going on today. Offshoring promotes not only trade, foreign jobs but also domestic cost savings and domestic work. More efficient business processes mean better prices to consumers and clients, which in turn generates local jobs and industry. If we want to halt offshore production we need to dramatically reduce taxes and fees. Once that happens we will witness a shift in the balance between what is produced domestically versus internationally.

The worse policy is of course trade protectionism. Protectionism enacts an enormous cost. The deleterious economic effects of protectionism range between $170.000 and $500.000 USD per job protected. In other words, the salvaging of a union job paying $70.000 a year, enacted for political benefit, actually costs society 2.5 x to 7 x that in total. Labour standards are a favourite distortion vehicle for limiting trade for example, and include inter-alia: fair labour practices, prohibition of child labour, human rights and promotion of democracy. (America vs Europe, p. 118) Environmental protectionism is also a prime means to protect politically sensitive union-jobs and distort trade patterns, which deranges both local and international job and wealth creation. This is one reason (amongst many) why the GlobaloneyWarming Eco-Terrorist cult is such a threat to our general and future prosperity. Eco-nonsense will be used to completely thwart trade and capital flows.

Back to South Korea and the US which amply supports all of the above statements. A 2007 draft agreement favourable to both states was signed which significantly reduced trade barriers in key market sectors. The O-Messiah as a Senate leader was of course against such a deal. So when the O-Deity assumed power he had to revise this agreement to suit his union-labourite supporters who had backed him with $160 million in election money over the last years of the 2008 election cycle. The inevitable happened. The original 2007 deal rapidly reduced barriers to trade in key and sensitive sectors. O-Messiah, knowing that he relies on union money for his political fortunes and elections amended the agreement to grant more protectionist scope to that auto and other union sectors:

The biggest mistake Mr. Obama and Democrats made was allowing one vocal lobby—Detroit and its unions—to hijack debate on a comprehensive deal covering almost all trade. Consider the main "victory" for Detroit: Korea has agreed to let America phase out its 25% tariff on pickup trucks more slowly. That will come at a stiff price to American buyers of those trucks, including many small businesses that delayed purchases during the recession.

Some farmers have also become collateral damage. Seoul couldn't walk away from re-opened talks empty-handed, and one concession it extracted is a two-year delay, to 2016, in eliminating tariffs on some U.S. pork.

American pork producers are excited about any deal, but they still would have been better off under the 2007 text. Chilean pork already enjoys lower tariffs thanks to the Chile-Korea FTA and has been gaining market share. The new tariff-elimination date also falls only six months before Korea's tariffs on EU pork will end under that deal, leaving Americans far less than the two-and-a-half years they would have had under the earlier text to get a marketing jump on their competitors.

The O-Messiah should be commended on getting this deal signed and hopefully ratified by both houses. Give credit to him when it is due. Everyone wins in a free-trade deal. But the deal itself should highlight just how active and usually pernicious political preference is in trade agreements. Both the Korean and US governments are highly protectionist, and show little real appetite or enthusiasm for true free trade.

Marx was wrong. Economics does not trump politics. It never has and it never will. Free, fair or beneficial trade will always be in danger as long as political masters have political constituencies to cater to who do not understand the benefits of trade, or view it through a Neo-Marxist lens as something inimical and evil. And that is a cultural and educational issue.