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Fri Apr 6, 2018, 01:31 AM

Democrats Should Ignore Trump/Bernie on Trade. Look to FDR, Not Hoover



I always wonder how did the idea of protectionist trade policies become associated with left? We often hear that Democrats need to look to FDR to regain power. However, what about trade? One the key things FDR did was to reverse the protectionist trade policies of Herbert Hoover. Can you imagine if you had Bernie/Trump type supports back in the day attacking such free trade agreements?

http://rooseveltinstitute.org/fdrs-comprehensive-approach-freer-trade/

A far more significant indication of the strength of protectionist sentiment can be seen in the broad bipartisan support for Tuesday’s legislation aimed at punishing China for currency manipulation. Both Republican Senator Jeff Sessions and Democratic Senator Chuck Schumer, for example, have emerged as key champions of the bill. But other Republicans and Democrats have expressed strong reservations about the measure, noting that one possible outcome of the bill might be a trade war with China. In a recent editorial in the Wall Street Journal, Senator Robert Corker even went so far as to liken the bill with the passage of the 1930 Smoot-Hawley Tariff, which he argued resulted in a “deeper depression and a decade of increased joblessness.”

Corker’s reference to damage wrought by Smoot-Hawley is accurate. The passage of Smoot-Hawley did indeed touch off strong counter-measures among our trading partners, leading to the establishment — among other things — of the 1932 British system of Imperial Preference, which allowed goods within the British Empire to be traded with little or no tariff restriction, locking out American goods and commodities and in the process weakening the U.S. economy. What is missing from Senator Corker’s warning is any reference to the tremendous effort that emerged during the Roosevelt administration to do away with protectionism; an effort that would ultimately not only break down the Smoot-Hawley Tariff, but which would also pave the way for the creation of the multilateral global economy we live in today.

The driving force behind this effort was FDR’s Secretary of State, Cordell Hull, who considered the passage of Smoot-Hawley an unmitigated disaster. Hull had been arguing in favor of freer trade for decades, both as a Democratic congressman and later senator from Tennessee. Given the long-standing protectionist tendencies of Congress — which reached their zenith with the passage of Smoot-Hawley, the highest tariff in U.S. history — Hull faced an uphill struggle to accomplish this task. He also had to overcome FDR’s initial reluctance to embrace his ideas, as the president preferred the policies of the “economic nationalists” within his administration during his first year in office. By 1934, however, FDR’s attitude began to change, and in March of that year the president threw his support behind Hull’s proposed Reciprocal Trade Agreements Act — a landmark piece of legislation that fundamentally altered the way in which the United States carried out foreign economic policy.

Convinced that the country was not ready for a truly multilateral approach to freer trade, Hull’s legislation sought to establish a system of bilateral agreements through which the United States would seek reciprocal reductions in the duties imposed on specific commodities with other interested governments. These reductions would then be generalized by the application of the most-favored-nation principle, with the result that the reduction accorded to a commodity from one country would then be accorded to the same commodity when imported from other countries. Well aware of the lingering resistance to tariff reduction that remained in Congress, Hull insisted that the power to make these agreements must rest with the president alone, without the necessity of submitting them to the Senate for approval. Under the act, the president would be granted the power to decrease or increase existing rates by as much as 50 percent in return for reciprocal trade concessions granted by the other country.

The 1934 Act granted the president this authority for three years, but it was renewed in 1937 and 1940, and over the course of this period the United States negotiated 22 reciprocal trade agreements. Of these, the two most consequential were the agreements with Canada, signed in 1935, and Great Britain, signed in 1938, in part because they signaled a move away from Imperial Preference and hence protectionism, and in part because they were regarded as indicative of growing solidarity among the Atlantic powers on the eve of the Second World War. It is also important to note that Hull, like many of his contemporaries, including FDR, regarded protectionism as antithetical to the average worker — first, because in Hull’s view high tariffs shifted the burden of financing the government from the rich to the poor, and secondly, because Hull believed that high tariffs concentrated wealth in the hands of the industrial elite, who, as a consequence, wielded an undue or even corrupting influence in Washington. As such, both FDR and Hull saw the opening up of the world’s economy as a positive measure that would help alleviate global poverty, improve the lives of workers, reduce tensions among nations, and help usher in a new age of peace and prosperity. Indeed, by the time the U.S. entered the war, this conviction had intensified to the point where the two men concluded that the root cause of the war was economic depravity.

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Response to TomCADem (Original post)

Fri Apr 6, 2018, 01:54 AM

1. They aren't the fucking same. These articles that try to put them on the same side of protectionism

Last edited Fri Apr 6, 2018, 03:42 AM - Edit history (4)

are misleading.

I don't know what an unmitigated disaster is here. Kudos to this person simply digging out something that didn't work in the past and saying, thus this can't be done right and is always wrong. Protectionism should be a means of raising wages and conditions internationally and fighting against a race to the bottom in terms of all of these issues. It should not be used to simply benefit certain industries without regard to those details. It should not be used to keep good actors who do have high standards from competing with our own. But instead, we don't do this and then our corporations cry crocodile tears about why they can't compete with those nations that pay their employees dirt and don't worry about the environmental costs, etc, thus they need more lax regulations here. And that becomes their excuse for outsourcing, and why shouldn't they. They pay no penalty for having their products made overseas. No tarrifs are applied to their products when they have them made under the worst conditions possible. I mean, foxxconn is lovely and all, but there are shittier companies out there too.


and wow what a video...that's downright offensive. Context is everything. just pulling shit out and sticking it together like that is awful. Trump is saying jobs jobs jobs without ideas or content behind it, or rather, the idea behind it has nothing to do with the American worker. When he says we're getting a shitty deal, that isn't what he means. He's looking for protectionism as no means at all of protecting the American worker. He is mad that he thinks ridiculously that our elite are losing to bad trade deals. Sanders on the other hand is furious that the trade deals benefit the elites here and abroad at the expense of people everywhere. He certainly isn't just promoting jobs as an empty talking point. He's promoting fair wages and treatment for people in those jobs. Yes, regarding, their rhetoric on nafta, there are similarities. Trump found that it could be useful and stole the language from Sanders, hell, by is own admission in the video. That doesn't make their actual positions even remotely similar, especially not their solutions. Nor does Trump's cynical use of these talking points make Sanders wrong on them.

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Response to JCanete (Reply #1)

Fri Apr 6, 2018, 05:25 AM

3. Bernie agrees with Trump that free trade is the problem. They only differ

on the precise details of their versions of protectionism.

http://www.ontheissues.org/2016/bernie_sanders_free_trade.htm

Q: So basically, there's never been a single trade agreement this country's negotiated that you've been comfortable with?

SANDERS: That's correct.

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Response to pnwmom (Reply #3)

Fri Apr 6, 2018, 12:09 PM

8. Because of who they benefit, that sounds like a fair point. That Trump is mad even though they

do benefit his rich buddies, but that he still thinks they are getting a raw deal, is hilarious.

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Response to JCanete (Reply #8)

Fri Apr 6, 2018, 01:17 PM

9. It sounds like a fair point to the ignorant. But HRC would have been elected

but for 70,000 votes in 3 states, in an election that disenfranchised millions of voters through voter suppression.

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Response to pnwmom (Reply #9)

Fri Apr 6, 2018, 01:19 PM

10. so you just called me ignorant? and then didn't bother to educate me on why I'm wrong? In fact

you went and talked about something entirely different than what I thought we were discussing. I thought we were discussing trade deals.


And just because Donnie lured some voters with a soundbyte doesn't mean there wasn't a kernal of truth it was based upon. That's more than usually exists in anything he says, I'll grant, but just because he says something doesn't automaticdally make it untrue, although the odds are ever in that favor.

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Response to JCanete (Reply #10)

Fri Apr 6, 2018, 06:40 PM

12. More Than A Soundbite. Trump is Following Through on Actions Bernie Advocated Re Trade

Bernie had continued to bang the anti-trade gavel through 2017 and only stopped once Trump actually began to follow through on policies that Bernie himself had been pushing for.

To me, this is the height of political cowardice. Trump had recently been focusing on trade, essentially stealing much of Bernie's rhetoric, and Bernie suddenly disappears on the topic.

I guess if it goes well, Bernie will claim credit. If it goes badly, Bernie will then insist that he would have done it totally different. Of course, how Bernie would differ is a mystery because Bernie is now suddenly silent on trade issues, which was once his trademark issues as recently as a few months ago.

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Response to TomCADem (Reply #12)

Fri Apr 6, 2018, 08:22 PM

13. No, nobody thinks this is going to go well. Trump's approach is certainly not going to be the same

as Sanders would have been, and I articulated the reasons to you already. The focus is entirely different. Trump is just doing favors for friends in certain industries. That's really all he's doing(intentionally). The side-effects are obviously going to have much further reach than he imagines.

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Response to TomCADem (Original post)

Fri Apr 6, 2018, 04:32 AM

2. Yeah, Dems!

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Response to TomCADem (Original post)

Fri Apr 6, 2018, 05:55 AM

4. I pretty much ignore both of them anyway

They were encased in amber decades ago.

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Response to TomCADem (Original post)

Fri Apr 6, 2018, 06:27 AM

5. The sale of supplies and arms to the WW II combatants substantially boosted the economy

 

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Response to TomCADem (Original post)

Fri Apr 6, 2018, 07:18 AM

6. Trade is a good thing

We screwed up and let TPP go. Now China will control most of the world.

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Response to TomCADem (Original post)

Fri Apr 6, 2018, 08:09 AM

7. CNN at it again..

interesting.. no corporate interests to protect here people.. no agenda

The fantastical irony is.. I think CNN just gave Bernie more coverage in that hit piece video than they did in the whole previous campaign season..

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Response to disillusioned73 (Reply #7)

Fri Apr 6, 2018, 03:25 PM

11. A Bernie Supporter Screams Fake News? Bernie Sanders Told Trump to Keep His Promise on NAFTA

As recently as December 2017. Now as Trump does many of the things that Bernie himself advocated, Bernie is suddenly hiding out when it comes to trade policy.

I just think that the most anti-trade Presidents in memory have been Republicans: Herbert Hoover and now Donald Trump. FDR, the gold standard of progressive Presidents, liberalized trade. Yet, being anti-trade agreement has somehow been deemed as of late to be a "progressive" position. China and Russia, two communist countries, have pursued trade deals. Yet, in the U.S., protectionist policies are somehow seen as progressive and socialist.

https://www.bloomberg.com/news/articles/2017-12-13/bernie-sanders-to-trump-on-nafta-for-once-keep-your-promise

Bernie Sanders Tells Trump to Keep His Promise on Nafta

President Donald Trump is finding an unlikely ally in his efforts to overhaul the North American Free Trade Agreement: the political left.

Civil-society groups, union leaders and left-wing politicians have opposed almost everything Trump has done. But they’re urging him to stand firm in his attempt to overhaul Nafta -- and face down opposition from business groups, who complain that U.S. companies will be hurt by the proposed changes. Mexico and Canada have called U.S. demands unworkable, including on regional-content requirements for cars and investor-state dispute systems.

Senator Bernie Sanders, an outspoken critic of trade deals in his campaign for president last year, called on Trump to deliver. “When Donald Trump campaigned for president, he promised that he was going to stop corporations from shifting American jobs to Mexico,” Sanders said Wednesday at a rally for the #ReplaceNafta movement in Washington. “For once in your life, keep your promises.”

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