July 5, 2009

"Free Trade" Helped Cause the Economic Crisis

Great discussion on HuffPo of "free trade." The problem isn't free trade of goods, it's that our jobs have been shipped to countries that don't have protections against worker and environmental exploitation. As Dave Johnson explains,

"Imagine a company in South Carolina that makes 20,000 pairs of shoes a week and distributes them to stores. Now, imagine that the company closes its South Carolina plant, opens a plant in a low-wage country, ships all the machines and raw materials there, ships back 20,000 pairs of shoes each week and distributes them to the same stores. Is that 'trade?' Are the raw materials sent out of the country an 'export?' Are the shoes brought back into the country an 'import?'

"The only thing that has been 'traded' in this scenario is American jobs traded for huge executive bonuses."
Meanwhile, foreign workers still can't afford the goods they're manufacturing, and we can't either because we've lost most of our decently-paid jobs. Without disposable income or equity, we masses can't continue to consume, and the economy grinds to a halt.

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