Alan Grayson: Our Trade Policy is Insane


I got another interesting email, this time from Alan Grayson.  His email had a transcript of the video below and a link to his web site.


I don’t agree with some of the ways that Alan Grayson explained all this, but for the most part I am definitely on his side. Or maybe that should be he is definitely on my side.

It is not so much that anything he said was untrue. It is mostly a problem that some of what he said could leave incorrect impressions on people who weren’t thinking about this carefully.

With reference to the email below, I’ll explain a few things that give me pause.

In talking about what foreigners do in trade relations with us.

… foreigners are not buying our goods and services.

What are they doing? They’re buying our assets.

Well, yes, but it is important to differentiate the foreign consumers who cannot afford to buy our goods and services from the foreign oligarchs who are buying our assets. It makes a huge difference when thinking of assigning blame and when thinking of what actions to take to right the wrongs being done to our middle-class.

Another one that bothers me a little is the following:

So we lose twice. We lose the jobs, and we are driven deeper and deeper into national debt – and, ultimately, national bankruptcy. That is the end game.

I am not exactly sure what debt he is talking about, but our federal budget deficit is not it. Mistakenly letting people confuse one thing for another is a dangerous way to talk. National bankruptcy of the kind he may be thinking about is not the same thing as citizens mistakenly believe will become the consequences of our budget deficits.

In the time limits of a speech and the space limits of an article, it isn’t possible to go into a deep discussion of what is exactly right and what is misleading and why it is misleading. What I would hope is that people like Alan Grayson (and yes, even Elizabeth Warren) could find words that could be just as powerful and yet not have possible unintended consequences.

Here is the letter.

Dear Steven:

This is a statement that I made at a D.C. news conference on trade policy last Thursday:

Trade is a simple concept. You sell me yours, and I’ll sell you mine.

That’s not what’s happening.

What’s happening is that day after day, month after month, and year after year, Americans are buying goods and services manufactured by foreigners, and those foreigners are not buying goods and services manufactured by Americans. We are creating millions — no — tens of millions of jobs in other countries with our purchasing power, and we are losing tens of millions of jobs in our country, because foreigners are not buying our goods and services.

What are they doing? They’re buying our assets.

So we lose twice. We lose the jobs, and we are driven deeper and deeper into national debt – and, ultimately, national bankruptcy. That is the end game.

This is not free trade; it’s fake trade. We have fake trade.

That’s why before NAFTA was enacted and went into effect, this country never had a trade deficit as much as $140 billion a year, while every single year since then — for 20 years now — we have had a trade deficit of over $140 billion a year.

We have had a[n average annual] trade deficit of half a billion dollars now, for the past 14 years.

Look back all across history. Look all across Planet Earth. You will see that the 14 largest trade deficits in the history of mankind are – all [of them] — the American trade deficits for the last 14 years.

(I cannot rule out the possibility that somewhere on Alpha Centauri there might be a country that has a larger trade deficit. But here on Planet Earth, no.)

Listen, we are in a deep, deep hole, thanks to fake trade. Thanks to fake trade, right now, 1/7th of all the assets in this country — every business, every plot of land, every car – 1/7th of all the assets in the country are now owned by foreigners. And ultimately, if we keep going the way we’re going, they all will be.

That’s why we have the most unequal distribution of income [among all industrial nations] in our country, [and] the most unequal distribution of wealth in our history.

We’re in a deep, deep hole. And there’s a simple rule about holes: When you’re in a hole, stop digging. Stop digging!

So I’m calling upon our leaders. I’m calling upon the American people. Let’s stop digging.

Let’s not only have a trade policy. For once, let’s also have a trade deficit policy.

Let’s deal with the reality that has robbed the American Middle Class now for decades. Let’s address it, and let’s defeat it. That’s what I’m calling [for], right now.

Let’s stop digging deeper. Let’s raise ourselves up, let’s climb out of this hole, and rebuild the American Middle Class. Thank you very much.

Courage,

Rep. Alan Grayson

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