Politics & Philosophy by Dr. Martin D. Hash, Esq.
When the word “progressive” is used in economic terms, it means the transfer of wealth downward, rich to poor. Conversely, “regressive” means the opposite, wealth goes upward; poor to rich. Free trade is regressive because it transfers wealth from the 99% to The 1%. How it does that has been obscured by the proselytizing that free trade provides cheaper goods for everyone, and that “a rising tide lifts all boats,” which seems true on the surface, except for a little publicized counter-example:
The U.S. has enormous trade deficits, meaning foreign countries are awash in U.S. money; and what do they do with those dollars? They buy U.S. Treasuries, and who ultimately pays off Treasuries? U.S. taxpayers. Free trade is subsidized by taxpayers, therefore the real price of free trade goods must include those costs, so the ultimate price of a free trade good is closer to the price if the product was made domestically. In the final analysis, average taxpayers are paying about the same overall with The 1% getting money equal to the Trade Deficit. A similar thing happens when a company builds a $100 million factory in China. The $100 million comes back in the form of China buying U.S. Treasuries, so the U.S. taxpayers are on the hook for the $100 million, so the only people that benefit from “free” trade are China and the company's shareholders.
Categories | PRay TeLL, Dr. Hash
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